India's Tata Motors Q1 profit beats estimates on strong luxury car sales
Consolidated net profit jumped 73.8 per cent year-on-year to 55.66 billion rupees (S$889.3 million) in the three months to June 30
INDIA’S Tata Motors reported a better-than-expected rise in first-quarter profit on Thursday (Aug 1), on higher sales of its more expensive car models in its luxury Jaguar Land Rover (JLR) division.
The country’s largest carmaker by revenue reported its consolidated net profit jumped 73.8 per cent year-on-year to 55.66 billion rupees (S$889.3 million) in the three months to June 30.
Analysts, on average, expected a profit of 54.25 billion rupees, per LSEG data.
The luxury JLR is Tata Motors’ bellwether, accounting for about two-thirds of the Tata Group company’s revenue. Among the British division’s cars, its Range Rover, Range Rover Sport and Defender models are its most margin-boosting as they are more expensive.
The contribution of these models to JLR’s total wholesale volumes increased to 68 per cent in the June quarter, it said in a quarterly update in July, up from 57.6 per cent in the last year.
However, JLR’s wholesales volume growth of 5 per cent in the quarter is its slowest in two years as its key European market exhibited weakness in demand.
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The company said it is retaining its full-year forecast of 8.5 per cent margin on earnings before interest and taxes (EBIT) for JLR.
Tata Motors’ revenue grew 5.7 per cent to 1.08 trillion rupees, its fifth straight quarter of slowing revenue growth.
Meanwhile, car wholesales in India hit a two-year low in the April-June as India’s general elections and extreme heat hurt demand, with the company’s total domestic sales volume growing 2 per cent in the quarter, its slowest in three quarters.
Rival carmaker Maruti Suzuki beat quarterly profit estimates, and Mahindra & Mahindra reported a larger adjusted profit on Wednesday. REUTERS
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