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Brexit chaos erodes Rs 2,300 cr from Tata Motors’ Q1 profit

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Mumbai, Aug 26 (PTI) The Brexit turmoil took a heavy tollon Tata Motors earnings for April-June, with the company todayreporting a 57 per cent plunge in net income at Rs 2,236crore. While a battered pound eroded Rs 2,296 crore from itsprofit, adverse commodity derivatives blew a hole of Rs 167crore. As the pound took a beating — sinking to a 31-year-lowfollowing the Brexit vote on June 24 — the company’s cash cowJLR took a 14 per cent forex hit at Rs 2,296 crore, offsettingthe higher income arising from better volumes, Tata Group CFOC Ramakrishnan told reporters here this evening. As a result, net income of Jaguar Land Rover (JLR) fell38.21 per cent to 304 million pound in the first quarter endedJune, from 492 million pound, while its revenue rose to 5,461million pound from 5,002 million pound a year ago. He said the overall numbers were driven down by lowermarket incentives in the quarter. The numbers would have beenstill lower but for the one-time income of Rs 478 crore, or 50million pounds, from claims arising out of the Tianjin (China)fire last financial year. "Operating performance of JLR reflects the overallhigher wholesales, offset by adverse forex impact of 207million pound, including revaluation of 84 million pound,mainly euro payables resulting from depreciation in the poundfollowing the Brexit vote," Ramakrishnan said. "Higher volumes in both standalone as well as JaguarLand Rover business were more than offset by the adverse foreximpact of Rs 2,296 crore and adverse commodity derivativesimpact of Rs 167 crore. On top of that, JLR operating profitwas also hit by lower local market incentives and higherdepreciation and amortisation expenses." For the quarter, consolidated revenue rose to Rs67,056 crore from Rs 61,510 crore, driven by improvement inthe businesses of both the parent as well as JLR on the backof strong sales in Britain, Europe, North America, China,whose volume share declined to 14.1 per cent in the reportingquarter from 20.5 per cent a year ago. Despite this, the China JV chipped in a profit of 45million pound, Ramakrishnan said. Despite the massive drop in numbers, the market lappedup the Tata Motors scrip, which rallied 4.24 per cent to Rs514.70 on BSE, whereas the benchmark Sensex recorded amarginal drop. PTI BEN RSYARD

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