India's largest automobile manufacturer, Tata Motors, has reported nearly 49% drop in its net profiit in the first quarter of current financial year (2015-16) due to declining sales in the world's biggest car market, China.
Tata Motors' net profit fell to Rs 2,769 crore in the June quarter compared to Rs 5,398 crore in the same period a year earlier.
A Bloomberg poll had projected the company's profit at Rs 3,234 crore in the April-June quarter.
Tata Motors' net sales fell to Rs 61,020 crore in the quarter against Rs 64,150.74 crore in the corresponding period last financial year.
A slump in sales is largely led by slowing economic growth in its key market China and weakening consumer sentiments in India. China is the largest market for Tata Motors' subsidiary Jaguar Land Rover (JLR), accouting for 20% of its sales.
"The financial performance in the quarter was lower than the strong corresponding quarter last year due to softer sales in China partially offset by strong performance in the UK, Europe and North America," Tata Motors said, according to a Money Control report.
Tata Motors' revenues from JLR fell 9.6% to Rs 49,178.5 crore in the quarter compared to Rs 54,425.97 crore in the corresponding period a year ago.
However, share prices of Tata Motors posted a gain of 2.52% on Friday to close at Rs 392.55 on the Bombay Stock Exchange. Overall, the stock prices of the company are down over 20% since the beginning of the year.
"Overall the environment and the numbers for Tata Motors doesn't look good for the next couple of quarters," Sudip Bandopadhyay of Destimoney Securities told CNBC-TV18.