Mumbai: Tata Motors Ltd ’s quarterly profit soared nearly 41% to a record high in the three months ended 31 December, exceeding estimates, thanks to robust sales growth at UK subsidiary Jaguar Land Rover Plc (JLR), on the back of models such as the Range Rover Evoque catching the fancy of buyers, besides favourable currency movements.

Gearing up: (From left) Ralf Speth, CEO, Jaguar Land Rover; P.M. Telang, MD (India operations); and C. Ramakrishnan, CFO, Tata Motors, after announcing the firm’s results in Mumbai. (Mitesh Bhuvad/ PTI)

JLR accounts for 90% of the company’s profit and 70% of revenue. A median estimate of 13 brokerages polled by Mint had pegged profit at 2,753 crore. Sales rose 44% to 45,260 crore.

The exchange rate benefit accounted for £60 million (Rs 464.4 crore) of net profit, C. Ramakrishanan, Tata Motors chief financial officer, said in a post-earnings call with analysts.

JLR sales surged 36.7% to 86,322 units, led by the Evoque that was launched in September 2011.

“Our order books are full, vehicles very much sought after but we are cautiously optimistic," said Ralph Speth, JLR chief executive.

JLR’s earnings before interest tax, depreciation and amortization (Ebitda) margin widened 2.7 percentage points to 20.1%.

Although the company will be able to maintain volume, such a high margin will not be sustainable and will narrow to 14-15% levels, said Amit Kasat, an analyst at brokerage Standard Chartered.

To strengthen JLR’s liquidity position, it has tied up a revolving credit facility with a consortium of 8-10 banks that have committed three-to-five-year credit lines for up to £710 million.

Tata Motors’ domestic business saw volume rising 15% to 131,220 units. While profit shot up to 173 crore from 1,032 crore, higher marketing expenditure in the passenger car business besides overall cost pressures and high commodity prices eroded the Ebitda margin to 6.7% from 7.2%. Sales rose 3% to 13,337 crore.

The firm expects the pressure on margins to continue in the forthcoming quarters, said Prakash M. Telang, managing director, India operations.

Tata Motors, which has risen 47% since January against the 21% increase in the auto index, advanced 3.74% to 267.90 on Tuesday on BSE. The benchmark Sensex rose 0.43% to 17,848.57 points. The results were declared during market hours.

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