MUMBAI, (AFP) – India’s largest carmaker Tata Motors Tuesday reported a 96 percent fall in quarterly profits, due to a cash ban which hit domestic business and weak sales at its luxury Jaguar Land Rover unit.
Consolidated net profit for the three months ending December fell to 1.12 billion rupees ($16.73 million) from 29.53 billion rupees a year earlier, the Mumbai-based company said.
Revenue fell 4.3 percent to 685.41 billion rupees.
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 percent 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 percent 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 percent on the Bombay Stock Exchange on Tuesday.