Jaguar Land Rover sales drive Tata Motors profit

Tata Motors Ltd romped home with a 71 per cent jump in net profit as the stellar performance of its UK unit Jaguar Land Rover Ltd helped the company to take a whopping Rs 804 crore loss from domestic operations in its stride during the July- September quarter.

Tata Motors, part of the $100 billion Tata conglomerate, has become dependent on its UK luxury unit to prop up profits as its passenger and commercial vehicle sales in the Indian market have been hit due to high interest rates, rising fuel prices and the economic slowdown.

Sales of Tata's Nano, promoted as the world's cheapest car, are well below expectations and there are few buyers for its SUVs which include the Sumo range as rivals have launched new models. There has not been an all- new Tata- branded passenger vehicle since 2010.

JLR, on the other hand, has been thriving on robust demand for its Jaguar XF and XJ saloons and Range Rover sport- utility vehicles, especially in China and the US. JLR, which was acquired by Tata Motors in June 2008 from Ford Motor Company for $2.3 billion, recorded a net profit growth of a phenomenal 66.2 per cent year- on- year to 507 million pound and revenue jumped 40.3 per cent to 4,612 pound million during the quarter.

Tata Motors consolidated net profit surged 71 per cent to Rs  3,542 crore during the fiscal second quarter from Rs 2,075 billion a year earlier, Tata said on Friday. Revenue rose 31 per cent to Rs 56,882 crore.

"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," the company said in a statement.

Commercial vehicle business will remain under stress due to economic conditions, the company said. Operating profit margin of the Indian operations stood at a mere 2 per cent.

Courtesy: Mail Today