Bloomberg News

Tata Motors at Record as Land Rover Propels Profit: Mumbai Mover

February 15, 2012

Feb. 15 (Bloomberg) -- Tata Motors Ltd. surged to a record after the owner of the Jaguar and Land Rover marques reported unprecedented quarterly profit on surging sales in China and demand for the Evoque compact sport utility vehicle.

Tata Motors rose 6.4 percent to 285 rupees at 2:22 p.m. in Mumbai, after gaining as much as 9.2 percent. The stock has advanced 60 percent this year, the biggest percentage gainer on the 30-company benchmark Sensitive Index, which has added 15 percent. The company is also the second-best performer in the last six months on the MSCI Asia Pacific Index.

Jaguar and Land Rover sales in China and Russia boosted profitability as demand in emerging markets helped tide over slower growth in advanced economies. The Evoque, which the company began delivering in September, accounted for 30 percent of Land Rover’s 65,287 retail sales in the quarter, according to a company presentation.

“Tata’s strong third-quarter results highlight the multiple positive tailwinds that continue to boost JLR’s earnings,” Abhijeet Naik and Nitij Mangal, analysts at CLSA Asia Pacific Markets said in a note to clients after the earnings announcement. Most of the positive factors “are likely to remain in place in the near term.”

Net income increased 41 percent to 34.1 billion rupees ($692 million) from 24.2 billion rupees in the three months ended Dec. 31 from a year earlier, Mumbai-based Tata Motors said in a statement yesterday. Profit surpassed the 26 billion-rupee median of 21 analysts’ estimates compiled by Bloomberg. Third- quarter sales rose to 452 billion rupees.

Monthly Gains

“The huge growth in China and the success of the Evoque is helping propel Tata Motors to record profits,” said Juergen Maier, a Vienna-based fund manager at Raiffeisen Capital Management, who oversees about $1.3 billion of emerging-market assets, including Tata Motors shares. “Volume growth at Jaguar and Land Rover should continue.”

Global deliveries at the luxury unit rose 44 percent in January, to 29,293 units, Tata Motors said in a statement today. Jaguar Land Rover sales have gained 25 percent to 245,705 vehicles in the ten months through January.

Tata Motors is turning to the British luxury brands it purchased from Ford Motor Co. in 2008 for growth and to drive international ambitions. The Jaguar Land Rover unit, based in Gaydon, England, generated 57 percent of Tata Motors’ revenue for the year ended March 31, up from 53 percent a year earlier.

China, Russia

Sales of Jaguar and Land Rover vehicles rose 37 percent to 86,322 units in the quarter, the company said. Jaguar sales more than quadrupled in China, and doubled in Russia in the quarter, compared with a year earlier, Tata Motors said in a presentation on its website.

The Evoque was named the North American truck of the year last month in Detroit. It received 32,000 orders with deliveries running into the first quarter of this year, John Edwards, global brand director of Land Rover, said Nov. 10.

“The sales numbers show promising growth with momentum now building in developed as well as developing markets,” said Mahantesh Sabarad, an analyst with Fortune Equity Brokers India Ltd. in Mumbai.

Tata Motors’ local sales of commercial vehicles in the quarter rose 16 percent to 131,220 units, while passenger vehicle deliveries increased 33 percent to 85,963, it said.

India’s passenger-car sales are forecast to increase 11 percent to 13 percent in the year beginning April 1, the Society of Indian Automobile Manufacturers forecast last month. The industry body has projected sales growth of 12-14 percent in truck sales for the 12-month period.

The company plans to introduce this year a new version of its Safari sport-utility vehicle, which it showed in New Delhi last month, as well as two new truck models.

--Editors: Arijit Ghosh, Vipin Nair

To contact the reporter on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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