Ripples Advisory|Tata group profit rises 35% under Chandra; importance of TCS, JLR declines
While Tata Motors' domestic business contributed with a 33 per cent year-on-year jump in net sales last financial year, the story at JLR was disappointing
In the first full financial year under Chairman N Chandrasekaran, the adjusted net profit of listed Tata group companies rose 35 per cent in 2017-18 against a 0.5 per cent decline in the previous year.
Group revenues, too, were up 9.2 per cent, growing at the fastest pace in the last four years.
Tata Steel was the star performer in 2017-18, with revenue from the domestic business rising 23 per cent last financial year. Its impact at the net profit level was significant — if Tata Steel were to be excluded, the net profit growth of the group would have been 10.3 per cent.
On the other hand, the group's two traditional cash cows, Tata Consultancy Services (TCS) and Tata Motors' subsidiary Jaguar Land Rover (JLR), are slowing as other businesses pick up pace. Besides steel, the group’s domestic consumer businesses have helped in improving revenue and profits.
The analysis is based on the annual financials of the Tata group's listed non-financial companies, excluding listed subsidiaries of Tata Steel, Tata Motors, Indian Hotels, Tata Chemicals and Tata Power, among others.
In all, the sample has 16 Tata companies. However, the three biggest — Tata Motors, Tata Steel and TCS — accounted for 85 per cent of the group's revenues last financial year. Exceptional gains and losses have been excluded from net profit.
While Tata Motors’ domestic business contributed with a 33 per cent year-on-year jump in net sales last financial year, the story at JLR was disappointing.
The contribution of TCS and JLR to the group's combined net profit declined to a seven-year low of 70.4 per cent in 2017-18, down from 98.5 per cent a year ago. TCS reported its first year-on-year decline in net profit last financial year, while JLR's net profit was down for the third consecutive year last financial year.
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