India's Tata Motors quarterly profit soars
India's top vehicle maker Tata Motors reported Friday a near four-fold rise in quarterly net profit, powered by higher demand for its British luxury brands Jaguar and Land Rover and better domestic sales.
The company said its global operations, including Jaguar and Land Rover, showed a consolidated net profit of 24.2 billion rupees ($537 million) for the three months ended December, up from 6.5 billion rupees a year earlier.
The profit for the three months beat market forecasts of 22 billion rupees.
Revenues rose 22 percent to 316 billion rupees for the quarter.
"We saw robust demand growth in the domestic market and for our premium luxury brands," C. Ramakrishnan, chief financial officer of Tata Motors, told reporters.
He said he was "cautiously optimistic" about demand over the medium term.
However, he said that high commodity prices and input costs were a cause for concern along with mounting interest rates making it more expensive for consumers to take out loans for cars.
Tata Motors has said it would resort to hiking the prices of its cars in response to rising commodity prices as a last resort.
For the quarter to December, the Jaguar-Land Rover business showed a profit of 275 million pounds ($439.6 million), up from 55 million pounds ($87.9 million) a year earlier as demand for cars improved across key markets.
"The company showed a good set of numbers, aided by strong Jaguar-Land Rover financials," said Mahantesh Sabarad, auto analyst at Fortune Equity Brokers.
Tata Motors also said demand for its Nano car -- dubbed the world's cheapest -- was also on the rise after monthly sales in November tumbled to 509 units, the lowest since its launch in July 2009. The company sold 6,703 Nano cars in January.
"We are seeing strong demand for the Nano," said Carl-Peter Forster, chief executive for Tata Motors.
He said he expected Nano sales to pick up even more strongly starting in March to hit 12,000 to 15,000 units a month as dealer outlets for the jelly-bean shaped car open across India.
Tata Motor shares rose 3.79 percent, or 41.75 rupees, to 1,144.65 rupees on the Bombay Stock Exchange ahead of the earnings announcement.
Tata Motors bought Jaguar and Land Rover from US Ford Motor Co in 2008 for $2.3 billion -- a purchase that coincided with the global financial crisis that hit sales of the luxury cars.
However, car sales have been on the rise as India recovers from the global downturn and the country's middle class enjoys increasing affluence.
© 2011 AFP