Tata Motors records first quarterly profit in a year
mumbai — Tata Motors, India’s biggest automaker by revenue, beat analyst estimates with its first quarterly profit gain in a year as buoyant sales at luxury unit Jaguar Land Rover, or JLR, got a lift from new models.
Tata Motors, part of the $100 billion Tata conglomerate, has become dependent on its UK unit to prop up profits. At home, passenger and commercial vehicle sales have suffered from an environment of high interest rates and fuel prices in an economy growing at its slowest pace in a decade.
Sales of Tata’s Nano, dubbed the world’s cheapest car, are well below expectations and there has not been an all-new Tata-branded passenger vehicle since 2010.
JLR, on the other hand, has been riding on resilient demand for its Jaguar XF and XJ saloons and Range Rover sport-utility vehicles, especially in China.
Net profit surged 71 per cent to Rs35.42 billion ($566 million) in the fiscal second quarter ended September 30 from Rs20.75 billion a year earlier, Tata said on Friday. Revenue rose 31 per cent to Rs568.82 billion.
The mean estimates of 10 analysts were profit of Rs25.49 billion and revenue of Rs539.8 billion, according to Thomson Reuters I/B/E/S.
Growth came “despite weak operating environment in the India business which was more than offset by increase in wholesale volumes and richer product and market mix at Jaguar Land Rover,” Tata said in a statement.
Shares of Tata, worth $18.23 billion, closed up 1.1 per cent before the results whereas the benchmark index ended down 0.8 per cent.
Domestic decline
Tata and rivals such as Mahindra & Mahindra and Maruti Suzuki India have watched sales in India fall almost every month in the fiscal year started on April 1, and the Society of Indian Automobile Manufacturers expects sales to end the year on a negative note.
“Continued slowdown in economic activity, low level of transport freight and infrastructure activity, frequent diesel price increases and tight financing environment, have impacted the industry during the quarter,” Tata said in the statement. —