Speed breaker ahead

Tata Motors' practice of capitalisivtg its product-development expenses could lead to heavy losses.

- Ashish Jain

The third-quarter results of Tata Motors jolted its investors, who were hypnotically looking at the growing JLR numbers. The company reported a fall of 96 per cent YoY in its consolidated profit, which dropped from ₹4,334 crore to ₹112 crore. But wait! This minuscule profit would actually look good if one took into account the fact that the company could have reported a big loss if it had not capitalised its product-development expenses.