Jaguar Owner Tata Jumps to 19-Year High After Posting Profit
By Vipin V. Nair and Siddharth Philip
Aug. 10 (Bloomberg) -- Tata Motors Ltd., the Indian owner of Jaguar Land Rover, jumped to the highest in more than 19 years after posting a first-quarter profit on demand for luxury sport-utility vehicles and $80,000 XF sedans.
Net income of 19.9 billion rupees ($430 million) in the three months ended June, compared with a loss of 3.3 billion rupees a year earlier, the company said in Mumbai today. Sales rose 64 percent to 268.8 billion rupees.
Tata Motors gained as much as 5.6 percent in Mumbai trading after Jaguar Land Rover benefited from a rebound in demand for luxury vehicles that has also caused Bayerische Motoren Werke AG and Daimler AG to raise their profit forecasts. Chairman Ratan Tata, 72, who plans to retire in 2012, intends to revamp Jaguar’s range by adding a station wagon, a new roadster and an entry-level model.
“Jaguar and Land Rover have done quite well,” said Taina Erajuuri, who helps manage the equivalent of $1.2 billion of emerging market stocks at Helsinki-based Fim Asset Management. “If economies continue picking up around the world, then people will buy more luxury cars.”
Tata Motors, run by Carl-Peter Forster, the former European head of General Motors Co., climbed to as much as 954.7 rupees, the highest price since at least January 1991, according to data compiled by Bloomberg. The stock changed hands at 954 rupees at 3:14 p.m.
Jaguar Profit
Jaguar Land Rover, which Tata bought from Ford Motor Co. in 2008 for $2.5 billion, posted a profit before tax of 233.82 million pounds ($370 million) in the quarter, the statement said without giving a year-earlier number. The U.K.-based luxury unit sold 57,153 vehicles compared with 35,947 a year earlier.
Sales of Tata-brand trucks, buses and cars rose 48 percent to 181,708 as expansion in Asia’s third-largest economy spurred demand. The company also makes the $2,500 Nano.
The auto maker sold 14,779 Nano cars in the first quarter. Last month, it raised prices of the car by as much as 4 percent. In June, Tata opened a factory in the western state of Gujarat that may eventually make as many as 350,000 Nanos a year.
Tata plans to raise as much as 47 billion rupees to expand operations and pare debt accumulated from the purchase of Jaguar Land Rover, it said June 28. The company, also India’s largest commercial-vehicle maker, had debts of 203.5 billion rupees, according to Bloomberg data.
India Growth
The Reserve Bank of India last month raised its forecast for economic growth to 8.5 percent this year from 8 percent. The central bank also raised benchmark interest rates for the fourth time since March to curb inflation in the world’s third-fastest growing major economy.
Rising demand has prompted overseas auto makers to open factories in India, increasing competition for Tata. Toyota Motor Corp., Volkswagen AG, and Honda Motor Co. were among carmakers that introduced 10 passenger vehicles at the Delhi Auto Show in January. Daimler, MAN AG and Navistar Inc. are also expanding truck operations.
Tata Sons Ltd., the holding company for Tata Group, said Aug. 4 that it has formed a five-member panel to search for a Ratan Tata’s successor. Ratan Tata, a Cornell University-trained architect, built Tata Group into India’s biggest business group with more than $70 billion of revenue. He spearheaded the development of the Nano and the acquisition of Jaguar Land Rover.
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