Jaguar Land Rover Europe demand helps Tata Motors triple profit
Jaguar Land Rover sales gains in Europe and China helped Tata Motors Ltd. triple its profit, beating analyst estimates.
Net income rose to 51.8 billion rupees ($771 million) in the three months ended March 31, Tata Motors said in a statement Monday. That compares with the 35.3 billion-rupee average of 25 analysts’ estimates compiled by Bloomberg. Profit at the Jaguar Land Rover luxury-vehicle unit increased 56 percent to 472 million pounds ($690 million).
Jaguar Land Rover deliveries in Europe jumped 55 percent in the quarter, faster than the 48 percent expansion in the preceding three-month period. The luxury unit’s sales in China climbed 19 percent, compared with a 10 percent drop in the previous quarter, with the start of local production of the Land Rover Discovery Sport SUV and the ramp-up of the Jaguar XE sedan.
“China is really coming back and we are cautiously optimistic that the global economy will continue to grow,” Ralf Speth, chief executive officer of Jaguar Land Rover, said at a press conference in Mumbai. “Therefore we hope that we can continue to grow in a very good way.”
The automaker is rolling out the XE model in the U.S. and is “seeing very good growth” in the market, he said. The company will continue to invest in new products, Speth said.
Revenue increased 19 percent to 806.8 billion rupees, compared with the 735.3 billion-rupee estimate of analysts.
Shares of Tata Motors rose 4.3 percent to 421.25 rupees in Mumbai before the results were announced. The stock has gained 7.7 percent this year, outpacing the 2.3 percent increase in the benchmark S&P BSE Sensex.
The automaker had a one-time gain of 5.55 billion rupees in the fiscal fourth quarter from insurance proceeds and other reimbursements after its luxury vehicles were damaged from a blast in August at Tianjin port in China, where they were stored.
Tata Motors said it has also provided for 6.41 billion rupees in costs it will incur over as many as four years for repairs related to Takata Corp. air bags fitted in some vehicles sold by Jaguar Land Rover. The company estimates about 100,000 cars will have to be recalled because of the Takata devices, Speth said.
Deliveries at Tata Motors’ India business, including exports, rose 3.9 percent to 144,507 units as it sold more trucks at home. While commercial-vehicle sales climbed 18 percent, passenger-vehicle deliveries plunged 32 percent.
The automaker’s latest model, the Tiago hatchback introduced in April, has a waiting period of as many as eight weeks, CEO Guenter Butschek said at the press conference.