Demonetisation hits domestic CV sales; 62 per cent drop in JLR profits after tax

Tata Motors has seen its Q3 profit (Profit After Tax) fall sharply by 96.20 per cent to Rs 112 crore versus Rs 2953 for Q3 FY16.

The reasons for the dip include lower sales in the domestic CV sector and a fall in profits for JLR.

Tata Motors has stated that during Q3 FY2017 (October-December 2016) its CV operations “witnessed demand shrinkage due to the demonetisation – the M&HCV segment witnessed major pressure with a fall of 9.0 percent YoY (year on year) and the LCV segment was overall flat. The passenger vehicles segment grew by 25.4 percent YoY, with the car segment growth of 31.1 percent YoY on the back of continued strong response to the Tiago. Exports grew by 34.6 percent YoY.”

Jaguar Land Rover reported an increase in revenues of £6,537 million (up 13.1 percent YoY), compared to £5,781 million for Q3 FY2016, but a lower operating profit for the quarter of £611 million (9.3 percent margin), compared to £834 million (14.4 percent margin) for the same quarter last year.

JLR says that the operating performance is a result of lower sales and a less favourable product portfolio; Other unfavourable factors include variable marketing expense and higher new-model launch costs.

Profit before tax (PBT) was £255 million for Q3 FY2017 (after an exceptional item of £85 million of further recoveries related to the Tianjin losses) compared to £499 million in Q3 FY2016. Profit after Tax (PAT) was £167 million for Q3 FY2017 compared to £440 million in Q3 FY2016, down 62 percent YoY.

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