India's Tata Motors swings into profit for year
India's top vehicle maker Tata Motors on Thursday swung into an annual profit for the fiscal year ended March, as government stimulus packages and an economic recovery boosted demand for cars.
The company said it made a consolidated net profit of 25.71 billion rupees (560 million dollars) in the financial year ended March 2010, compared with a loss of 25 billion rupees in 2008-09.
The earnings, which beat market expectations, included financial data from British luxury marque Jaguar and Land Rover.
Total income across the company, which is part of the tea-to-steel Tata Group conglomerate, jumped 31 percent to 925 billion rupees.
Out of that, Jaguar and Land Rover accounted for 493 billion rupees.
Tata Motors' India operations saw annual profit soaring 124 percent to 22.4 billion rupees.
"Overall economic recovery and government stimulus packages led to a strong domestic demand revival in the current year," the company said in a statement issued to the Mumbai stock exchange.
Tata Motors paid 2.3 billion dollars to buy Jaguar and Land Rover in 2008 and launched the cars in India in June last year.
Tata Motors rose 4.74 percent, or 33.65 rupees, to 742.9 prior to the earnings announcement, which came after the market closed.
Tata Motors, which also makes the world's cheapest car -- the Nano -- now commands a 64 percent share in India's commercial vehicles market and 12.4 percent in the passenger car segment.
"India could continue to see buoyant growth in the auto sector in coming months," said senior analyst Mahantesh Sabarad of Mumbai-based Fortune Equity Brokers India.
Global automakers have been steering to China and India, the world's two fastest-growing major economies, as sales in most developed countries slumped in the fallout of the global financial crisis.
Mahantesh expects Tata Motors to show a 15 percent growth in both commercial and passenger car segments to the next fiscal year.
"JLR may have however seen its best performance. The ongoing financial uncertainty across Europe could have an impact on spending and sales of luxury cars like Jaguar-Land Rover," he said.
© 2010 AFP