NEW DELHI/MUMBAI: Tata Motors Ltd , India's biggest automaker by revenue, said profit dropped seven percent in the second quarter, disappointing market expectations of a rise after a sharp drop in car sales at home.
Tata said its net profit, also hit by higher taxes, dropped to 32.91 billion rupees ($533 million) in the second quarter ended Sept. 30 -- below analyst forecasts of 46.2 billion rupees, according to Thomson Reuters I/B/E/S. Revenue rose 6.5 percent to 601.64 billion rupees -- again below expectations -- while sales of its commercial and passenger vehicles, excluding exports, fell 15.7 percent.
Faced with slowing sales in its domestic business, Tata Motors has been reliant on sales by luxury British carmaker Jaguar Land Rover (JLR), which it bought in 2008, to prop up profits for the past few years.
While Tata dominates the trucks and buses segment in India, its passenger cars have failed to lure customers away from local rival Maruti Suzuki India Ltd and foreign competitors like Hyundai Motor Co and Honda Motor Co.
Tata's domestic car sales fell 32 percent to 73,137 vehicles in the six months from April to September, industry data showed.
Total passenger car sales rose 4.1 percent to 890,755 units over the same period. Tata's domestic operations posted a net loss of 18.5 billion rupees in July-September compared with 8 billion rupees a year ago, the company said.
JLR, however, posted a 41 percent increase in net profit for the six months to Sept. 30 to 1.14 billion pounds ($1.79 billion).
As part of its new strategy, Tata plans to launch two new vehicles every year until 2020, starting with passenger car Zest, which it launched in August as its first new offering in four years.
It said the response from customers for the Zest had been "encouraging", and that demand had exceeded supply.
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