UPDATE 2-India's Tata Motors sees profit surge in March qtr

* Domestic demand, sales at Jaguar Land Rover drive growth

* Earns $471 million in March quarter

* Sees JLR sales up in U.S., to grow in China

* Shares up 4.7 percent before results report

(Adds details, quotes from news conference)

By Janaki Krishnan

MUMBAI, May 27 (Reuters) - Tata Motors (TAMO.BO), India's top vehicle maker, beat market estimates with a surge in March quarter earnings, helped by rising sales and profitability at its Jaguar Land Rover (JLR) unit.

India's leading maker of trucks and buses is riding a surge in demand at home, but said reviving interest in the United States and growth in China would be key to boosting sales.

"The JLR business is showing a lot of potential and there is good market reception of our products," Chief Executive Carl-Peter Forster told reporters.

"In US and China, we are seeing demand returning and we are seeing increasing sales in the US. We are broadening our foothold in China to further grow the market."

In a recent update, Moody's Investors Service said the U.S. auto sector was on track towards recovery, while China was seeing continued strong demand.

General Motors [GM.UL] posted its first quarterly profit since 2007 as domestic demand steadied and sales boomed in China. Rival Ford also posted a quarterly profit. Both expect to end 2010 on a profitable note. [ID:nN17250181]

Tata expects to significantly boost sales in China to about 20,000 Land Rovers and 5,000 Jaguars in 2010/11.

Its UK-based luxury brands Jaguar and Land Rover, which depend on a stronger global economy to drive sales, reported a net profit of 73 million pounds in the March quarter, but Tata Motors said currency volatility and recent signs of a slowdown in Europe were a concern.

"We are all watching what's happening in the eurozone. In recent times we have all seen a bit of slowing down, but I think this can be resolved," Forster said.

EARNINGS BEAT FORECAST

The company earned 22.28 billion rupees ($471 million) in the three months ended March 31, based on Reuters calculations after it posted full-year profit of 25.71 billion compared with a net loss of 25.05 billion rupees reported a year ago.

Tata Motors earned a profit of 3.16 billion rupees in the year-ago quarter, Reuters calculations showed. I/B/E/S estimated net profit for the quarter at 8.03 billion rupees on revenue of 109.9 billion rupees.

Tata Motors, whose products include the ultra-cheap car Nano, had reported global sales in the quarter ended March rose 66 percent to 275,194 vehicles.

JLR sales, which contributes about half of Tata Motors revenues, doubled to 57,004 units, thanks to reviving demand in Europe, North America and China.

Earlier this month, JLR sold its idled manufacturing unit in Coventry, one of its two plants in the Midlands, to UK-based Lawrence Automotive Interiors.

Demand for trucks, which are the company's mainstay, have been picking up after a sluggish first half of 2009/10 and should support earnings as the Indian economy is set to expand more than 8 percent in 2010/11.

"Overall economic recovery, a benign liquidity environment along with government stimulus has driven domestic demand revival," the company said in a statement.

It said the company planned several new products launches in the near future aimed at improving its market position.

Commercial production of Nano will start in June at its new dedicated facility in the western Indian state of Gujarat, which has an annual capacity of 250,000 vehicles.

Asked if Tata Motors was considering the launch of a new car model, between the ultra-low cost Nano and Indica hatchback, Forster said this was a segment the company was looking at and would make an announcement later.

Shares in Tata Motors, valued at $7.5 billion, ended up 4.7 percent at 742.90 rupees before the results release, while the main index .BSESN rose 1.7 percent.

The shares are down 6 percent this year, compared with a 5 percent drop in the main index .BSESN. ($1 = 47.3 rupees) (Writing by Prashant Mehra; Editing by Surojit Gupta and Jason Neely)