Tata Motors posted a near 50% fall in its consolidated net profit in the quarter ending March 31 due to the poor performance of its British subsidiary, Jaguar Land Rover (JLR), and increased expenses, including for technology development.

The company, whose portfolio includes affordable Tata-branded cars, big and small commercial vehicles, and premium brands Jaguar and Land Rover, reported a profit of Rs 2,176.16 crore, nearly half of Rs 4,336.43 profit a year ago.

The reduced profit, the company said, can be attributed to an investment of Rs 2,113 crore for developing technologies for its newer models and slower sales growth of Jaguar Land Rover, which contributes nearly 90% of the company’s revenue. The automaker, the fourth largest passenger vehicle maker in India by sales, recorded an 18.2 % rise in revenue from operations to Rs 91,279.1 crore from Rs 78,746.61 crore a year ago. Tata overtook Honda Motors in sales last financial year.

The quarter has not been the best for company’s luxury division, with JLR’s retail sales falling 3.8%. Its fourth-quarter revenue dropped a little more than 12% to Rs 69, 410.88 crores, from Rs 61,591.65 crores. JLR’s operational profit dropped 44% to Rs 3,317 crore from Rs 5,931.30 crore a year ago.

“Despite external headwinds, these results reflect the underlying strengths of Jaguar Land Rover. We are confident of our plans to drive robust growth and efficiencies to ensure that we continue to deliver solid results and generate sustainable profitable growth to support continued investment with positive free cash flows in the medium to long term,” said Ralf Speth, CEO, Jaguar Land Rover.

Speth said “strong demand in key overseas markets” offset the challenging conditions in the UK and other parts of Europe. “We are one team with pioneering spirit, delivering outstanding new cars, with the best of British design and engineering integrity, leading in customer desirability,” he said.

The company said it has seen a strong demand for its electric SUV, the Jaguar I-PACE, and the newly-launched compact SUV, the E-PACE.

Tata Motors’ standalone sales jumped 36% to 204,255 units in the quarter from 150,448 units in the same period last year. The company said the commercial vehicles (CV) growth was driven by increased market demand particularly for high tonnage vehicles, newly launched products, increased acceptance of SCR technology, and improved stakeholders’ engagement.

“We invested for growth, launched exciting new products and established landmark partnerships. In the near term, the challenges of the market, technology and geo-political uncertainties are likely to persist. This is the 10th year of Tata’s acquisition of JLR. In this period, we grew 5 times, strengthened our differentiated premium brands, built leading edge technical capabilities and improved profitability by 1,300 bps (basis points),” N. Chandrasekaran, chairman of Tata Sons, the holding company, said in a statement.

“We want to structurally improve the business with reinforced and focused actions in PV, and continuing the momentum in CV from last year. Our future pipeline is full of attractive products, bundled with the most desirable and customer-centric service offerings," said Guenter Butschek, CEO, Tata Motors.

Tata Motors’ shares closed 0.49% higher on the BSE at Rs 309.25. The results were announced after the market closed.

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