Mumbai - India's Tata Motors swept past forecasts with a fourth straight quarterly profit, driven by demand for its luxury Jaguar and Land Rover brands, boosting its shares to their highest in at least two decades.
Tata soars on Jaguar, LR demand
The company's Jaguar and Land Rover (JLR) unit, which Tata bought from Ford in 2008, is expected to fuel growth in coming quarters as demand for luxury brands increase, particularly in emerging economies.
Rising numbers of wealthy, brand-conscious Chinese are overtaking debt-burdened Europeans and Americans as the source of sustained demand for Europe's premium cars.
During the quarter ended June, Tata Motors sold 181 708 vehicles, up 48% from a year earlier.
Tata's results come amid a surge in demand for cars, trucks and buses in India. Car sales in India hit a record high in July, jumping 38% from a year earlier, boosted by the launch of new models and the strong economy.
Tata Motors is the country's leading maker of trucks and buses with about two-thirds of the market. It also makes utility vehicles such as the Safari, Tata Magic and Winger and cars such as the ultra-cheap Nano, Tata Indica and the premium sedan Indigo Manza.
"The numbers have far exceeded our expectations," Surjit Arora, an analyst at brokerage Prabhudas Lilladher, said.
"The momentum should continue as JLR is seeing strong sales both in the UK and China," he said.
The JLR unit sold 57 153 vehicles in the June quarter, up from 35 947 a year earlier.
Chairman Ratan Tata recently said in the company's annual report that it would add more Jaguar models, including an entry-level car, a station wagon and a roadster.
The company has begun a search to replace Ratan Tata, who is due to retire by the end of 2012.
On Tuesday, the company said it was in talks with potential joint venture partners to start assembly-line operations for the JLR brands in China. The company also plans to start assembling Land Rover vehicles in India next year.
Other automakers are also taking advantage of the growing demand for luxury vehicles in China. Sales of Daimler's luxury brand Mercedes-Benz grew by just over 17% in July.
BMW, the world's biggest maker of premium cars, posted its best ever quarterly pretax profit earlier this month. It said it had never sold as many Rolls-Royce models in six months as it had this year, pointing to a sharp recovery and broad-based demand for luxury cars.
But recovery is still unsteady in the United States and Europe where the industry is investing in technology to improve fuel economy.
Volatile currencies could impact JLR profitability, Tata Motors said on Tuesday.
Supply of engines from Ford, with which Tata Motors has an agreement, was not keeping pace with demand for JLR products, the Indian firm said.
In separate news, Tata Motors chief executive officer also announced on Tuesday plans to start assembling Land Rover vehicles in India from next year, where it already sells the vehicles.
Tata, which acquired luxury brands Jaguar and Land Rover from Ford in 2008, is also in talks for assembly line operations in China.