Tata Motors (NYSE:TTM), the Indian multinational automotive manufacturing company, has announced plans to increase the prices of its commercial vehicles by 3%, effective from the start of October. This decision comes in response to the residual impact of past input costs, according to a regulatory filing released by the company after market hours on Monday.
The price hike will apply across Tata Motors' entire range of commercial vehicles. This marks the third price adjustment by the automaker this year, following a 1.2% increase in January and a 5% rise in March. These earlier adjustments were implemented to ensure compliance with new emission norms introduced by the government.
From April 1, stricter regulations were enforced through phase II of Bharat Stage 6, including real-time driving emissions testing. This has led to increased costs for automakers, prompting companies like Tata Motors to adjust their pricing strategies.
Despite broader market weakness on Wednesday, shares of Tata Motors rose as much as 0.99% to hit an intraday high of INR 647. The stock continued its upward trend for the third consecutive session, outperforming the Sensex which was down 1.02%.
The company's financial health appears robust with a reported net profit of INR 3,202.80 crore in the first quarter of the current financial year. This is a significant turnaround from a loss of INR 5,006.60 crore during the same period last year. Tata Motors also reported a revenue increase of 42.54%, rising to INR 1,01,528.49 crore from INR 71,227.76 crore year-on-year.
The impact of these price adjustments on Tata Motors' future financial performance remains to be seen as they navigate through the evolving regulatory landscape and fluctuating input costs.
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