Tata Motors profits plummet 96% after cash ban

Mumbai - India's largest carmaker Tata Motors on Tuesday reported a 96% fall in quarterly profits, due to a cash ban which hit domestic business and weak sales at its luxury Jaguar Land Rover unit.

Consolidated net profit for the three months ending December fell to 1.12bn rupees ($16.73m) from 29.53bn rupees a year earlier, the Mumbai-based company said.

Revenue fell 4.3% to 685.41bn rupees.

The company's commercial vehicles business saw a "demand shrinkage" owing to the Indian government's shock move in November to withdraw high-value banknotes from circulation, it said.

Prime Minister Narendra Modi's demonetisation drive removed around 86% of India's cash at a stroke, triggering massive queues outside banks and a cash shortage that has hit businesses across the country.

"The segment witnessed major pressure with a fall of nine percent year-on-year" in sales, the company said.

Its Jaguar Land Rover business saw "lower wholesale volumes and relatively weaker product mix... and overall higher marketing expenses," the company said in its statement.

Shares in Tata Motors, part of the sprawling tea-to-steel conglomerate, fell 7.3% on the Bombay Stock Exchange on Tuesday.