Automobiles: Hero, Tata Motors drive sector performance

Automobile makers posted a strong third-quarter performance, thanks to Tata Motors’ strong volume growth overseas.

The sector showed 28 per cent and 18 per cent growth in net sales and net profit respectively despite making provisions for currency loss.

Maruti Suzuki reported a weak performance, which though was in line with expectations.

Mahindra & Mahindra reported strong sales growth but net profit fell by almost 10 per cent. Hero MotoCorp’s sales showed a double-digit growth and a strong 40 per cent plus rise in net profit.

Bajaj Auto maintained sales and profit growth on the back of strong exports while TVS disappointed with a single-digit growth in sales and profit.

Operating margins were up marginally by 30 bps, but trend remain mixed.

Despite correction in global commodity prices, manufacturers could not benefit due to sharp rupee depreciation in the third quarter.

Tata Motors posted strongest results on the back of an impressive JLR sales growth.

Operating margins rose by 110 bps, thanks to a 60 million pound benefit from re-pricing of receivables.

The forex losses surged by whopping to Rs 164.34 crore on sharp depreciation of rupee against US dollar and Euro.

The company’s standalone operating performance continued to remain under pressure with margins at 6.4 per cent, the lowest in the last 10 quarters, impacted by elevated marketing spends and pricing pressure.

Maruti Suzuki recorded a sharp drop in operating margins, the lowest in the last nine years.