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Tata Motors Ltd (NYSE:TTM)
Gross Profit
\$16,716 Mil (TTM As of Sep. 2016)

Tata Motors Ltd's gross profit for the three months ended in Sep. 2016 was \$3,991 Mil. Tata Motors Ltd's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$16,716 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Tata Motors Ltd's gross profit for the three months ended in Sep. 2016 was \$3,991 Mil. Tata Motors Ltd's revenue for the three months ended in Sep. 2016 was \$10,043 Mil. Therefore, Tata Motors Ltd's Gross Margin for the quarter that ended in Sep. 2016 was 39.74%.

Tata Motors Ltd had a gross margin of 39.74% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Tata Motors Ltd was 40.25%. The lowest was 20.53%. And the median was 34.90%.

Definition

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

Tata Motors Ltd's Gross Profit for the fiscal year that ended in Mar. 2016 is calculated as

 Gross Profit (A: Mar. 2016 ) = Revenue - Cost of Goods Sold = 40325.6945265 - 24093.5433669 = 16,232

Tata Motors Ltd's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 10042.8532028 - 6051.98774466 = 3,991

Tata Motors Ltd Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 4310.73962855 (Dec. 2015 ) + 4429.35137664 (Mar. 2016 ) + 3984.82282894 (Jun. 2016 ) + 3990.86545812 (Sep. 2016 ) = \$16,716 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

Tata Motors Ltd's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 3,991 / 10042.8532028 = 39.74 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.

Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Tata Motors Ltd had a gross margin of 39.74% for the quarter that ended in Sep. 2016 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Tata Motors Ltd Annual Data

 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Gross_Profit 1,558 3,064 4,578 6,356 9,705 11,352 12,713 14,715 16,392 16,232

Tata Motors Ltd Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 3,887 4,252 4,331 4,114 3,582 4,311 4,429 3,985 3,991 4,059
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