AFP Mumbai, Maharashtra, India
Feb 14, 2017, 03.21 PM
Indian carmaker Tata Motors's quarterly profits went downhill by 96 per cent, owing to Indian government's sudden decision to replace currency notes and its luxury Jaguar Land Rover unit's weak performance.
Last year, India's largest carmaker had recorded a Rs 29.53 billion in the three months ending December last year, but this year the profits plummetted to Rs 1.12 billion.
The company's revenue fell 4.3 per cent to Rs 685.41 billion.
The company's commercial vehicles business saw a "demand shrinkage" owing to the Indian government's shock move in November to withdraw high-value banknotes from circulation, it said.
Prime Minister Narendra Modi's demonetisation drive removed around 86 per cent of India's cash at a stroke, triggering massive queues outside banks and a cash shortage that has hit businesses across the country.
"The segment witnessed major pressure with a fall of nine per cent year-on-year" in sales, the company said.
Its Jaguar Land Rover business saw "lower wholesale volumes and relatively weaker product mix... and overall higher marketing expenses," the company said in its statement.
Shares in Tata Motors, part of the sprawling tea-to-steel conglomerate, fell 7.3 per cent on the Bombay Stock Exchange on Tuesday.