The Malaysian Reserve

Tata motors boosts cash hoard by 87% to expand

A steering wheel sits inside a battery versionof Jaguar's iconic E-Type roadster automobile on display at the annual tech fair of Tata Motors Ltd.'s Jaguar Land Rover division in London, on Friday, Sept. 8, 2017. Jaguar Land Roverwill offer electric options across its range of sleek sedans and upscale SUVs as the tradition-rich British carmaker pivots toward electric vehicles under pressure from the U.K. and other governments. Photographer: Chris Ratcliffe/Bloomberg

by BLOOMBERG

MUMBAITata Motors Ltd, the owner of luxury car brands Jaguar Land Rover (JLR), is building a war chest that will allow it to expand its business and acquire rivals.

Cash and equivalents at the Indian maker of the Tiago and Hexa cars surged 87% to 397.6 billion rupees (RM25.84 billion) as of June 30 from a year earlier, according to data compiled by Bloomberg. Reliance Industries Ltd, India’s biggest company by market value, had 721 billion rupees in cash in the period. The most among the nation’s companies.

Tata Motors, which has reported three straight quarters of sales declines, gets 78% of its revenue from the luxury brands and plans to use its record cash pile to add new products, technology and manufacturing capacity, according to C Ramakrishnan, group CFO at Tata Motors. JLR has said it will spend about £4 billion (RM22.72 billion) to expand in the next three years.

“JLR also may have capital expenditure opportunities going forward while there are emerging areas like electric vehicles and autonomous cars where Tata may decide to dip their feet,” said Deepesh Rathore, director at Emerging Markets Automotive Advisors in London.

Brokerages including Morgan Stanley and Ambit Capital cut their recommendations for Tata Motors after the company missed analyst’s estimates for the three months ended June 30. A one-time gain helped JLR post a 49% jump in profit before tax of £595 million. — Bloomberg