Tata Motors Profit Trails Estimates as India Sales Slump

Tata Motors Ltd. (TTMT), India’s biggest automaker, posted profit that missed analyst estimates as a wider loss at the local business eroded gains from its Jaguar Land Rover unit.

Net income declined to 39.2 billion rupees ($664 million) in the fiscal fourth quarter ended March 31, the Mumbai-based company said yesterday. That lagged behind the 46.1 billion-rupee median of 30 analyst estimates compiled by Bloomberg. Jaguar Land Rover profit increased to 449 million pounds ($750 million) from 377 million pounds, it said.

The luxury unit is helping buoy the company, which is struggling to revive profitability at its Indian business. Domestic deliveries of cars, trucks and buses declined 36 percent in the quarter, while sales gained 8 percent at Jaguar Land Rover, spurred by demand in China.

“I’m not expecting any miracles from the domestic business of Tata Motors,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said before the earnings announcement. “The domestic business has slipped a lot and will continue to underperform for the next one or two quarters.”

The loss at the standalone level widened to 8.17 billion rupees from 3.12 billion rupees a year earlier.

Tata Motors fell 1 percent to 424.30 rupees at the close in Mumbai trading, before the earnings were announced. The stock has climbed 13 percent this year, compared with a 14 percent advance for the benchmark S&P BSE Sensex Index.

The company’s ADRs (TTM) fell 1.5 percent to $38.15 at 1:50 p.m. in New York trading, after the release of the results.

Vehicle Sales

Sales at Jaguar Land Rover, the automaker’s main profit contributor, climbed 16 percent to 434,311 vehicles in the 12 months ended March.

Annual deliveries of trucks, cars and buses at the parent, including exports, fell 30 percent, according to the company.

Jaguar Land Rover began test production in China yesterday, Chief Executive Officer Ralf Speth said in Mumbai yesterday. The luxury carmaker plans to start making cars in the country by the end of this year to avoid the nation’s 25 percent import tariff.

Local production will help the carmaker reduce prices by about 15 percent, Bob Grace, the company’s China president said last month. The plant will have an initial annual output capacity of 130,000 vehicles, he said.

The automaker is also building a mid-size sports sedan called the XE that will go on sale in 2015. The Jaguar XE will compete against Bayerische Motoren Werke AG’s 3 series and Daimler AG’s Mercedes-Benz C Class cars. The model will be the first Jaguar to be built on an all-aluminum platform, the company said in a statement in March.

XE Model

The XE model will feature four cylinder, 2 liter gasoline and diesel engines built at the company’s new engine factory, the company said at the time.

“While the local business is still weak, Jaguar Land Rover is doing very well, especially on the Jaguar side,” said Juergen Maier, a fund manager in Vienna at Raiffeisen Capital Management, which oversees about $1.1 billion in emerging-market assets. “China and Europe are still looking good and with new models coming in at the end of the year, Jaguar Land Rover should continue to do well. The local business will still take some time to stabilize.”

To contact the reporter on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net Subramaniam Sharma, Dick Schumacher

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