BENGALURU, July (Reuters) – Tata Motors (TAMO.NS), India’s largest automaker by revenue, comfortably beat quarterly profit expectations on Tuesday, helped by strong demand for its luxury Jaguar Land Rover (JLR) cars and as supply chain issues improved further.
The UK-based JLR unit, which accounted for 70% of Tata Motors’ revenue, has benefited from strong demand for its higher-margin SUVs like the Range Rover and an improving supply of semiconductors after crippling shortages for several quarters.
Subsequently, JLR logged its highest production levels in nine quarters in April-June, while strong retail sales led to a 66% surge in revenue.
Meanwhile, Tata’s revenue from passenger vehicles, mostly through sales in India, rose 11%. However, that was slower than the 15% growth in the previous quarter, with a price hike in the latest quarter likely offsetting the strong domestic demand.
Tata, which makes India’s top-selling sport utility vehicle, Nexon, has raised prices three times this year, but is “not looking at any major price hikes”, group chief financial officer PB Balaji said in a media call.
Balaji said passenger vehicle demand is expected to be “robust” for the coming quarters. JLR’s production though is expected to be lower this quarter due to an annual summer plant shutdown.
The Mumbai-based automaker posted a consolidated net profit of 32.03 billion rupees ($391.3 million) for the April-June quarter, compared with a year-ago loss of 50.07 billion rupees.
That beat analysts’ estimates of a profit of 26.29 billion rupees, per Refinitiv IBES data.
Overall revenue rose over 42% to 1.02 trillion rupees, mostly due to JLR.
JLR’s earnings margin before interest and taxes turned positive to 8.6% in the quarter, while its net debt reduced to 2.5 billion pounds ($3.20 billion) as of June-end.
Separately, Tata Motors plans to cancel its ‘A’ ordinary shares in its latest move to simplify its securities structure. ($1 = 81.8530 Indian rupees) ($1 = 0.7803 pounds)
