India’s Tata Motors reported a surprise quarterly profit on Wednesday (Jan 25), its first in two years, on rising demand for passenger cars and as its luxury unit Jaguar Land Rover (JLR) turned profitable.

The company reported a consolidated net profit of 29.58 billion rupees (S$477.2 million) for the quarter ended Dec 31, compared with a loss of 15.16 billion rupees a year earlier, it said in an exchange filing.

Analysts, on average, had expected a loss of 185.6 million rupees, according to Refinitiv IBES data.

JLR’s profitability stemmed from higher sales, a favourable product mix and better pricing, partially offsetting higher inflation. The unit’s profit before tax in the quarter was £265 million (S$429.2 million) against a loss of £9 million, a year ago.

Automakers are reaping the benefits of easing commodity costs and the slew of price hikes to make up for cost inflation. Tata Motors has been increasing the prices of its cars in the domestic market in step with costs.

Over the past two years, it has nearly doubled its share in India’s passenger vehicles market to about 14 per cent as demand rebounded from pandemic lows, according to data from the Federation Of Automobile Dealers Associations.

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Maruti Suzuki India, which holds more than a 40 per cent share in India’s car market, beat quarterly profit estimates and reported improved margins driven by improved realisations from its utility vehicles on Tuesday.

Tata Motors said its passenger vehicle business continued its strong momentum in the third quarter, with wholesales growing 33 per cent year-on-year. REUTERS