By Kashish Tandon and Meenakshi Maidas
(Reuters) -India’s Tata Motors, the country’s top commercial vehicles maker, expects high single-digit percentage growth in demand in the second half of the fiscal year, driven by government’s tax cuts and a pick-up in construction.
“We should see higher single-digit growth in demand for across ranges in the second half,” Girish Wagh, MD and CEO of Tata Motors, said in a post-earnings call on Thursday.
Government’s tax cuts and pick-up in infrastructure activity, such as mining and construction, will be key drivers of demand, Wagh said.
The Ace mini-truck maker’s total sales grew about 3% during the first half of the fiscal year, which started April 1.
India simplified its goods and services tax structure on September 22, lowering the levy on commercial vehicles to 18% from 28% to spur demand.
Earlier on Thursday, the truckmaker reported a quarterly loss of 1.02 billion rupees ($11.60 million) due to a one-time impairment charge.
Excluding that charge, profit jumped about 57% to 17.57 billion rupees on strong festive season demand for small cargo trucks.
Automakers enjoy strong demand ahead of the festive season as fleet operators stock up to meet peak consumption and logistics needs during India’s busiest shopping period.
The company’s sales rose 12% year-on-year to 94,681 units, driven by a 9% increase in domestic sales and a 75% surge in exports. This drove overall revenue 9.3% higher to 168.04 billion rupees during the quarter.
The company, which split from the passenger vehicles business in October, made its trading debut on India’s stock exchanges on Wednesday, listing at a 28.5% premium. The shares were down nearly 3% on Thursday.
The two units now operate independently under the Tata Motors group.
($1 = 87.8950 Indian rupees)
(Reporting by Kashish Tandon and Meenakshi Maidas in Bengaluru; Editing by Mrigank Dhaniwala, Harikrishnan Nair and Eileen Soreng)
