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November 7, 2012 2:10 pm
Surging sales and profits at Jaguar Land Rover boosted quarterly earnings at Tata Motors as the UK premium car business paid its weaker parent a dividend for the first time.
However, the Indian company’s results lagged behind market expectations as it struggled with a weak economy and growing competition in its domestic Indian cars and trucks business.
India’s largest carmaker by revenues reported net profit of Rs20.8bn ($380m) for the quarter to the end of September, 11 per cent higher than a year previously. The company’s revenues for the quarter were Rs434bn, 20 per cent higher than the group reported a year ago.
Analysts polled by Thomson Reuters had forecast Tata would report net earnings of Rs24.41bn and revenues of Rs442bn for the quarter.
Jaguar Land Rover reported a second-quarter pre-tax profit of £305m, up 77 per cent on the same period a year ago on the back of strong demand for its luxury cars and sport utility vehicles.
Tata, which bought JLR from Ford Motor for $2.3bn in 2008, said that during the quarter the business paid it a maiden dividend of £150m.
JLR said its retail sales totalled 84,749 for the quarter, up 29 per cent on a year ago. The unit, Tata Motors’ biggest business by far, said it planned to spend about £2bn during the current financial year.
“Jaguar Land Rover has delivered another quarter of positive results against a challenging economic backdrop,” Ralf Speth, the UK company’s chief executive, said. “We continue to see strong sales across all our key markets.”
The business has added 8,000 new staff over the past two years and this year moved to three-shift, 24-hour production at two of its three UK plants to keep up with increased demand for vehicles such as its new Range Rover Evoque.
However, in India Tata said that its medium and heavy-duty trucks division had been hurt during the quarter by a weak economy, higher diesel prices and sluggish industrial demand.
Tata said that during the quarter it faced competitive pressures on its pricing power in some segments and a weak product mix, pushing its operating margin down to 6 per cent for the quarter, compared with 7 per cent a year ago.
The group said that it sold 223,655 cars and passenger vehicles for the quarter, 6 per cent more than a year ago.
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