[[posterous-content:pid___0]]The Tata Motors stock closed 1.8% lower on Monday at Rs 268, but it is still fairly close to its 52-week high reached in mid-March.
Investor sentiment has been buoyant, as vehicle sales at the company's key Europe-based Jaguar Land Rover (JLR) expanded 46.6% year-on-year in the first two months of the fourth quarter of FY12, faster than the growth seen in the first three quarters of the fiscal.
Once again the company has benefited from the strong demand in Europe for its recently launched SUV, Evoque, and on expanding in the fast-growing BRIC markets it focuses.
JLR accounted for nearly 62.5% of Tata Motors' total income from operations of Rs 1,14,746.6 crore in the first nine months of the current fiscal, and 75.4% of its profit from the segment.
However, in a recent report, a Europe-based leading foreign portfolio investor has expressed concerns over signs of Chinese luxury car market slowdown in the and rising incentives and discounts being offered by German luxury carmakers to sustain sales volumes.
According to this report, presently JLR is expanding its dealer and marketing network in China, and about margins their concerns are more, rather than volumes. To an email seeking comments Tata Motors did not respond over this.
China had appeared as a key market for JLR in the first three quarters of the current fiscal, with Jaguar's sales volumes growing 148.8% Yo-Y to 5,136 units. Total Jaguar sales during this period were 38,796 units.
For Land Rover, retail volumes in China grew 54.9% Yo-Y to 28,289 units in the first three quarters of the fiscal, while globally it sold 168,455 units.
According to ETIG estimates, the recent development in the Chinese luxury auto market is expected to have no impact on the company's performance in the fourth quarter.
Strong demand for Evoque is expected to help Tata Motors (on a consolidated basis) report a 112% Y-o-Y growth in net profit for the March 2012 quarter, and a 59% improvement in net sales.
A fall in its core consolidated is faced by Tata Motors had faced operating profit margin in the first and second quarters.
And in the December 11 quarter, its consolidated operating profit margin (excluding the amount capitalized and other non-core items) was broadly flat at 10.1%.Automobile News
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