Tata Motors profit takes a hit of Rs 27,838 crore at JLR
Mumbai: Tata Motors said on Thursday that its profit after tax of Rs 26,961 crore during October to December 2018 was impacted by an exceptional item of asset impairment in Jaguar Land Rover of 3.1 billion pounds (about Rs 27,838 crore).
However, the consolidated revenue for the quarter rose by 5 per cent to Rs 77,001 crore in the year-on-year period.
In a filing to the Bombay Stock Exchange, the auto major said its performance was impacted by challenging market conditions--particularly in China--and inventory corrections.
The company said that JLR announced its plans in January to achieve 2.5 billion pounds of investment, working capital and profit improvements by March 2020. For that, it suggested a reduction in its global workforce by 4,500 people. This is expected to result in a one-time exceptional redundancy cost of about 200 million pounds.
Tata Motors Chairman N Chandrasekaran said: "The company has taken decisive steps to step up competitiveness, reduce costs and improve the cash flows while continuing to invest in exciting products and leading edge technologies. With these interventions, we are building Tata Motors group to deliver strong results in the medium terms."
The company announced a non-cash exceptional charge to reduce the book value of capitalised investments.
"This accounting adjustment is consistent with the other decisive actions that we must take as part of our 'Charge' and Accelerate transformation programmes to create an efficient and resilient business, enabling Jaguar Land Rover to counter the multiple economic, geopolitical, technological and regulatory headwinds presently impacting the automotive industry. We are taking the right decisions now to prepare the company for the new technologies and strong product offensive for the future,” it said in a statement.