Tata Motors profit up 10% on JLR

Ratan Tata-led Tata Motors Ltd net profit fell short of expectations as rising marketing costs hurt its margins and slowing economic growth curbed demand for its commercial vehicles.


India's largest car maker by revenue said net profit rose to 20.75 billion rupees ($381 million) in July-September from 18.77 billion rupees a year ago, while revenue increased 20 percent to 434.03 billion rupees on rising demand at its key Jaguar Land Rover subsidiary.
Analysts expected profit of 24.41 billion rupees on revenue of 441.91 billion rupees, according to Thomson Reuters I/B/E/S.
The operating margin for its India business fell to 5.9 percent for the quarter down from 7.2 percent in the year ago period. Tata Motors' Chief Financial Officer C. Ramakrishnan said that the company expected to improve its India profit margins, as it continues to focus on cutting operational costs, but the demand outlook was clouded by the slowing economic growth.
We continue to see sluggish economic activity, he said. We continue to see demand pressure in the market.
Tata Motors, which depends on JLR for 90 percent of the group's profit, said the iconic British brand's operating margin stood at 14.8 percent in July-September, down from 14.9 percent a year earlier.
Revenue at the luxury British brand rose 12.8 percent to 3.29 billion pounds in the period, less than the 34.4 percent gain seen in the previous quarter. Tata has grown dependent on JLR, which it bought for $2.3 billion in 2008, as domestic sales of its own models struggle.