Tata Motors Ltd’s share price down, posts its fourth quarter results, profit misses analysts’ estimates

The largest auto manufacturer in India – Tata Motors Ltd made an official statement yesterday, revealing its fourth quarter results. The companys profit for the period missed analysts estimates due to losses in Tatas local business that eroded the gains generated from its Jaguar Land Rover business.

As reported by the Wall Street Journal, the Chief Financial Officer of Tata Motors Ltd – C. Ramakrishnan commented on the companys fourth-quarter results, saying: “Performance at the Indian business continues to remain challenging.” Mr. Ramakrishnan believes that the slow economic growth in the country, combined with low customer sentiment and increasing fuel prices continue “to affect demand for automobiles in general and commercial vehicles in particular”.

According to the companys statement, Tata Motors net income fell to 39.2 billion rupees (664 million dollars) over the fourth financial quarter that ended March 31st, trailing the 46.1 billion-rupee median estimate of analysts. The Indian company also reported that the profit of its Jaguar Land Rover unit rose from 377 to 449 million pounds (750 million dollars). The sales uncreased by 15% over the last three months of the financial year and reached 656.16 billion rupees.

The company benefited by its luxury car unit, which is making its best to bring a new life to the profitability of the entire companys business. However, the Indian market has shrunk, and cars, trucks and buses domestic deliveries of Tata Motors fell by 36% over the quarter.

As reported by Bloomberg, Mr. Alex Mathews, who occupies the position of head of research at Geojit BNP Paribas Financial Services Ltd commented on the companys performance before Tata Motors Ltd to announce any data: “Im not expecting any miracles from the domestic business of Tata Motors. The domestic business has slipped a lot and will continue to underperform for the next one or two quarters.”

Recently, the business segment in India, where Tata Motors Ltd operates, has been affected by slowing industrial activity and customer interest. Moreover, a few global motor groups have set foot in the country over the last ten years in an attempt to expand their reach and post rapid growth in an emerging market featuring with a large aspirational middle class.

Tata Motors Ltd was losing 0.97% to trade at 420.20 Indian rupees per share by 8:15 GMT, marking a one year change of +33.40%. According to the information published on the Financial Times, the 52 analysts offering 12-month price targets for Tata Motors Ltd have a median target of 456.00, with a high estimate of 543.00 and a low estimate of 245.00. The median estimate represents a 7.47% increase from the last price of 424.30.