New Delhi - India's Tata Motors said Friday its quarterly net profit surged by a surprise 71% as a robust performance by its British luxury marque Jaguar Land Rover offset a dive in domestic sales.
The country's top vehicle maker has become heavily reliant on revenues from JLR which it bought for $2.3bn from Ford in 2008 at the height of the global financial crisis.
But the purchase, seen by auto analysts at the time as a risky gamble for the Indian company, has paid off dramatically for Tata Motors.
The auto giant, which also makes the low-cost Nano hatchback, reported that consolidated second-quarter net profit climbed to 35.42bn rupees ($558m) from 20.75bn rupees a year earlier.
British unit Jaguar Land Rover's after-tax profit for the three months to September soared by 66.2% to 507 million pounds ($811m).
"The weak operating environment in the India business was more than offset by the increase in wholesale volumes and richer product and market mix at Jaguar Land Rover," the company said in a statement.
The profit increase for the three months to September was the first in four financial quarters to be posted by Tata Motors. The profit far outstripped market consensus forecasts of around 25 billion rupees.
Total revenues of Tata Motors, part of the giant steel-to-software Tata Group led by chairman Cyrus Mistry, jumped 31% to 568.82bn rupees.
Jaguar Land Rover's sales climbed an overall 21% to 102 644 units in the quarter, according to the statement.
Jaguar deliveries climbed 56.5% to 20 024 units. Land Rover sales increased 14.8% to 82 620 vehicles.
But in India, demand for new cars has slowed rapidly due to high borrowing costs, worries over a sharp slowdown in the economy and costly fuel prices have kept buyers out of showrooms, hitting Tata's domestic revenues.
On a standalone basis, Tata Motors' India operations swung to a net loss of 8.04bn rupees in the second quarter compared with a net profit of 8.67bn rupees in the same period a year earlier while sales slumped 29% to 8.76bn rupees in the period.
"A continued slowdown in economic activity, low level of transport freight and infrastructure activity, frequent diesel price increases and tight financing environment, have impacted the industry," Tata Motors said.
India's economy has been growing at a decade low of five percent, putting the brakes on the once-red hot domestic car market.