Tata Motors surges on profits from Jaguar Land Rover

Subramaniam Sharma
Bloomberg News

Tata Motors Ltd. rose the most in almost three years after Jaguar Land Rover sales gains in Europe and China helped triple its profit, beating analyst estimates.

The shares gained 9.1 percent, the most since September 2013, to 459.65 rupees at the close in Mumbai. Tata was the best performer on the benchmark S&P BSE Sensex, which declined 0.2 percent.

Jaguar Land Rover Chief Executive Officer Ralf Speth said China is coming back and the automaker is optimistic about global economic growth as it invests in new products. The luxury-vehicle unit is ramping up sales of the Jaguar brand’s F-Pace crossover and XE sedan in the U.S., as well as the long wheelbase version of the XE sedan in China. Land Rover will begin selling a convertible version of its Evoque sport utility vehicle in the coming months.

“The Jaguar plan has worked like clockwork so far, supporting margins and profits, and we expect the F-Pace to drive significant earnings growth as volumes ramp up,” Robin Zhu and Yang Liu, analysts at Sanford C. Bernstein, wrote in a report, maintaining their outperform rating on the stock. With new models including the Discovery “on the runway, and the pound remaining supportive, we remain convinced that Tata/JLR will grow earnings beyond expectations.”

Tata Motors’ net income tripled to 51.8 billion rupees ($771 million) in the quarter ended March 31, compared with the 35.3 billion-rupee average of analysts’ estimates compiled by Bloomberg. Profit at the Jaguar Land Rover unit increased 56 percent to 472 million pounds ($690 million).