Tata Motors Passenger Vehicles (500570) Q4 97/98 earnings summary

Executive summary

• FY97/98 revenue fell 27% YoY to Rs 7,362.79 crore; PBT declined 67% to Rs 328.80 crore and PAT fell 61% to Rs 294.66 crore.

• Results reflected a deepening automotive downturn and acknowledged market-share losses, export underperformance and delayed production cuts that left high inventory and receivables.

• The recommended dividend was Rs 5.50 per share, down from Rs 8 in FY96/97.

Financial highlights

• Sales and other income: Rs 7,362.79 crore vs Rs 10,128.43 crore; operating profit before interest: Rs 600.81 crore vs Rs 1,215.50 crore.

• PBT was Rs 328.80 crore vs Rs 1,000.46 crore; tax was Rs 34.14 crore vs Rs 238.10 crore; PAT was Rs 294.66 crore vs Rs 762.36 crore.

• Vehicle sales totaled 152,928, down 29% YoY; exports were 14,331 vehicles, down 10%, with export value down 10% to Rs 600.78 crore.

• Shareholders’ funds rose to Rs 3,755.18 crore from Rs 3,647.57 crore; net worth was Rs 3,755.18 crore.

Outlook and guidance

• Recovery was considered unlikely for most of FY98/99 amid weak demand and uncertainty; the outlook depended on stronger industrial activity and sustained policy support.

• The indigenous small car remained on time and within cost targets, with domestic launch planned for Q4 1998; production facilities and supplier arrangements were progressing.

• New medium/heavy vehicles, a broader passenger-vehicle range and upgraded excavators were planned; new excavator models were expected in FY98/99.

• Construction equipment sales were expected to improve as infrastructure investment gained emphasis; Dharwad production was expected to begin during the year.