Mumbai: Spurred by cost cuts and better vehicle sales, Tata Motors Ltd’s Jaguar and Land Rover (JLR) business has registered its first quarterly profit since the country’s largest auto maker bought it in June 2008.
The business reported a net profit of Rs416 crore for the three months ended 31 December.
Ravi Kant, vice-chairman at Tata Motors, told reporters the company’s cost reduction initiatives “have begun to reflect on the bottomlines”, and it “hopes to continue on this path in the future”.
Smooth ride: Tata Motors vice-chairman Ravi Kant. Harikrishna Katragadda/Mint
JLR profits boosted Tata Motors’ consolidated net sales to Rs25,979 crore, up 48% over a year ago, and swung losses into a net profit of Rs650 crore.
The company’s earning took some analysts by surprise. “The results are significantly better than what we had expected,” said Joseph George, an analyst at BNP Paribas Securities India Pvt. Ltd. George expects this trend to continue as the benefits of sourcing from low-cost countries kick in.
Albeit on a low base of the previous year, the company’s domestic and export volumes increased 67.5% to 165,413 units.
On the back of new models and recovery in markets such as Russia, China and the US, retail sales (direct sales to the customer) of Jaguar and Land Rover models went up 28% to 55,300 units.