* July-September net profit 35.42 bln rupees vs 25.49 bln
rupees analyst estimate
* Revenue rises 31 pct to 568.82 bln rupees
* Profit rests on buoyant sales at Jaguar Land Rover unit
By Aradhana Aravindan
Nov 8 Tata Motors Ltd, 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 Ltd got a lift from new models.
Tata Motors, part of the $100 billion Tata conglomerate, has
become dependent on its U.K. 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 percent to 35.42 billion rupees ($566
million) in the fiscal second quarter ended Sept. 30 from 20.75
billion rupees a year earlier, Tata said on Friday. Revenue rose
31 percent to 568.82 billion rupees.
The mean estimates of 10 analysts were profit of 25.49
billion rupees and revenue of 539.8 billion rupees, 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 percent
before the results whereas the benchmark index ended
down 0.8 percent.
Tata and rivals such as Mahindra & Mahindra Ltd
and Maruti Suzuki India Ltd have watched sales in
India fall almost every month in the fiscal year started 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.
Tata's domestic operations posted a net loss of 8.04 billion
rupees in July-September compared with a year-earlier profit of
8.67 billion rupees. JLR, however, posted a 66 percent increase
in net profit to 507 million pounds ($814 million).
"This year, it will be JLR that will drive Tata Motors,"
said KR Choksey analyst Neha Patel, who expects the domestic
business to recover mildly next year as and when the economy
begins to pick up.
JLR is building its first manufacturing plant outside the
United Kingdom in China, which analysts widely expect to surpass
the United States as the biggest premium car market by the end
of the decade.
The unit, which Tata bought in 2008, expects to sell 100,000
cars in China this year compared with 77,000 cars last year.
JLR pitches its vehicles to a slightly lower, broader
segment of the luxury market, helping it escape the brunt of a
Chinese government crackdown on conspicuous spending that is
affecting sales of rival marques such as Bentley and
Launches this year of the Jaguar F-Type sports car and new
Range Rover Sport SUV helped September-quarter wholesale sales
of the iconic British brands rise 31.6 percent to 101,931
Analysts regard lacklustre performance at Tata's India
business as a concern, but most recommend the stock because they
expect continued strong sales at JLR.
Of 51 Tata analysts tracked by Thomson Reuters, 43 have a
positive recommendation on the stock which has risen 23 percent
so far this year. The main index has risen 6.4 percent.