Tata Motors’ Q2 net vaults 71% to Rs3,542 crore on JLR sales

Tata Motors, India's largest vehicle maker, has reported a 71 per cent surge in its quarterly net profit as a faster growth at its iconic British luxury brands Jaguar Land Rover offset falling domestic sales.

Consolidated second-quarter (July-September 2013-14) net profit of Tata Motors jumped to Rs3,542 crore ($558 million) from Rs2,075 crore a year earlier.

Sales for the three months ended 30 September 2013 rose to Rs56,882 crore from Rs43,403 crore a year ago. The UK unit accounted for more than 70 per cent of Tata Motors' sales and more than 100 per cent of profit.

Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 58.2 per cent year-on-year to Rs9,273 crore for the quarter.

Consolidated operating profit margins improved to 16.3 per cent from 13.5 per cent in the year-ago quarter.

''The weak operating environment in the India business was more than offset by the increase in wholesale volumes and richer product and market mix at Jaguar Land Rover,'' the company stated.

Earnings were also boosted by a falling rupee.

Net after-tax profit of Tata Motors' British unit Jaguar Land Rover for the July-September 2013 quarter soared 66.2 per cent to 507 million pounds ($811 million).

Overall sales of Jaguar Land Rover increased by 21 per cent to 102,644 units in the quarter, Tata Motors said in a release.

Jaguar deliveries rose 56.5 per cent to 20,024 units. Land Rover sales increased 14.8 per cent to 82,620 vehicles.

Against this, Tata Motors reported a net loss of Rs804 crore at its  India operations in the second quarter compared with a net profit of Rs867 crore in the same period a year ago.

Sales of its commercial and passenger vehicles (including exports) declined 32.5 per cent to 150,930 units, compared to the corresponding quarter in the previous year. Revenues fell 29 per cent year-on-year to Rs8,868 crore.

Stand-alone operating profit margins dipped to a more than four- year low of two per cent compared to 5.9 per cent in the same quarter last year.

While Tata Motors' sales in India was hit by a decade-low growth of the economy, JLR put up a strong performance driven by a slew of new launches and sturdy demand from China.

JLR expects to sell 100,000 cars in China this year compared with 77,000 cars last year.

The company is also building its first manufacturing plant outside the United Kingdom in China.

The unit, which Tata bought for $2.3 billion from Ford in 2008 at the height of the global financial crisis, has paid off handsomely with the iconic luxury brands accounting for most of Tata Motors' profit (See: Tata Motors confirms Jaguar, Land Rover deal with Ford for $2.3 billion).