Tata Motors closes gap with RIL on revenue

Tata Motors has closed the revenue gap with Reliance Industries. While Reliance remains the country’s largest private sector enterprise in terms of revenues (including other income), Tata Motors topped the charts in terms of core reveunes (net sales) in the fourth quarter. Country’s top automaker reported net sales of Rs 67,576 crore in the March 2015 quarter compared to Reliance Industries consolidated net sales of Rs 67,470 crore. (See chart)

With total revenues of Rs 69,642 crore, however RIL remains ahead of the automaker. In the last quarter RIL reported other income of Rs 2,172 crore far higher than Tata Motor’s other income of Rs 245 crore. Reliance is also more profitable than Tata Motors.

Reliance revevues are on a downward trajectory thanks to decline in international crude oil prices. This has led to a decline in the rupee value of RIL revenues as refined products such as petrol and diesel comprise bulk of its revenues.

Tata Motors on the other hand has gained handsomely from the rising popularity of its Jagauar luxury cars and Land Rover SUVs in Russia, China and United States. 

In some ways Tata Motors is reclaiming the ground its lost to its peers in late 1990s and in the first half 2000s. For three years between financial year 1990-95 and FY97, Tata Motors was India’s largest private sector company and ahead of Reliance Industries. 

Tata Motors position in the league table is not certain given the global volatality in the crude oil prices and the fluctuations in the global vehicle sales especially luxury cars. The automakers needs a faster uptick in its domestic business especially its struggling passenger car business if its wishes to maintain the pole position in terms of revenues.

Globally automkers vie with the global energy majors and retailers for the top position in the revenues league tables. Toyota for instance is Japan’s largest company while Volkawagen tops the list in Germany. In United States, General Motors topped the charts till a decade ago when it lost out to Walmart and Exxon Mobile due to its poor performance.