Tata Motors closes gap with RIL on revenue

Tata Motors has closed the revenue gap with Reliance Industries Ltd (RIL). While RIL remains the country’s largest private sector company by revenue (including other income), Tata Motors topped the chart by core revenue (net sales) in the fourth quarter ended March. The country’s top automobile maker reported net sales of Rs 67,576 crore in the quarter, against RIL’s consolidated net sales of Rs 67,470 crore.

With total revenue of Rs 69,642 crore, however, RIL remains ahead of the auto maker. In the quarter, RIL reported other income of Rs 2,172 crore, far higher than Tata Motors' other income of Rs 245 crore. RIL is also more profitable than Tata Motors.

RIL’s revenues have been falling recently, thanks to sliding international crude oil prices. Consequently, the rupee value of RIL’s revenues has been declining, as refined products such as petrol and diesel comprise bulk of the company’s revenues.

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

In a way, Tata Motors is only reclaiming the ground it lost to rivals in the late 1990s and in the first half of 2000s. For three years —1994-95, 1995-96 and 1996-97 — Tata Motors was India’s largest private sector company by revenue.

Tata Motors’ position in the pecking order is not certain, given the global volatility in crude oil prices and fluctuations in global vehicle sales, especially luxury cars. The auto maker needs a faster uptick in its local market, especially in its struggling passenger car business, if it wishes to regain the pole position by revenues.

Globally, auto makers vie with energy giants and retailers for the top position in the revenue league table. Toyota, for instance, is Japan’s largest company, while Volkswagen tops the list in Germany. In the US, General Motors topped the chart till a decade ago when it lost out to Walmart and Exxon Mobile, due to its poor performance.

Tata Motors

Reliance Industries Limited (RIL)