India’s largest carmaker, Tata Motors, saw its quarterly profit increase threefold because of high demand for cars produced by the British luxury division.
Even if the automaker struggles at home, where demand has steadily declined overall, Tata Motors, itself a subsidiary of the $100 billion Tata conglomerate, reported its consolidated net profit jumped to 53.98 billion Indian rupees ($882.31 million). The figure – the highest over the last nine quarters – compares to 17.26 billion rupees for the same period in 2013.
“JLR benefited from strength in China demand, strong variant mix and ability,” Govindarajan Chellappa and Rajasa Kakulavarapu, analysts at Jefferies wrote in a note today. “Strength in China is the key to sustenance of the high levels of profitability.”
Sales for the April to June quarter at Jaguar Land Rover climbed 22% to 115,596 cars, while Tata’s domestic deliveries of trucks, buses and passenger vehicles went down 28% to 110,612 autos.
The Indian side of the business now has an operating margin of minus 2.8 %, while JLR’s earnings moved from 15.8% last year to 20.3% last quarter. After buying the Jaguar Land Rover unit in 2008 from Ford, Tata has been buoyed by the premium division in recent years, riding on increased demand from China, the world’s biggest single auto market.