Quarterly profits of India's largest carmaker, Tata Motors, have reportedly plummeted 56 percent due to low market demand for the carmaker’s luxury vehicles.
The slump in quarterly net profits, which was reported on Tuesday, was blamed on weak earnings from sale of the company’s luxury British unit and sluggish sales in India’s domestic market, AFP reported.
According to the report, the company’s consolidated net profits for the fourth quarter, which ended March 31, fell to 17.17 billion rupees (USD 268.28 million) from 39.18 billion rupees during the same period a year before.
The company, which is headquartered in Mumbai, issued a statement adding that the profits figure was below the expectations of 24 analysts surveyed by Bloomberg who had predicted a 40.6 billion-rupee profits for the giant automaker.
The carmaker is part of India's massive conglomerate, the Tata Group, which runs a diverse line of businesses ranging from tea to steel.
Tata Motors' consolidated net profits for the financial year also fell from 139.91 billion rupees to 139.86 billion rupees (USD 2.19 billion) for the period of 2013-14.
Another factor contributing to the slide of company’s profits was a 33-percent decline in profits at Jaguar Land Rover (JLR), which Tata Motors bought from Ford for USD 2.3 billion in 2008.
In a statement to the stock exchange, the company blamed the fall at JLR to "higher depreciation and amortization," effectively higher write-offs, and "unfavorable revaluation of foreign currency debt and unrealized hedges."
Tata Motors, however, remained optimistic about JLR's potential, saying that it was likely to invest nearly four billion pounds (USD 6.16 billion) in the luxury unit in coming months.
Prolonged decline in sales of small commercial vehicles in India also helped to reduce the company’s earnings, the company added.
