Tata Motors’ Profit Estimates Rise Due To Strong JLR Sales

Tata Motors, India's largest automaker by revenue, comfortably beat quarterly profit expectations on Tuesday, helped by strong demand for its luxury Jaguar Land Rover (JLR) cars and as supply chain issues improved further.

The UK-based JLR unit, which accounted for 70 per cent of Tata Motors' revenue, has benefited from strong demand for its higher-margin SUVs like the Range Rover and an improving supply of semiconductors after crippling shortages for several quarters.

Subsequently, JLR logged its highest production levels in nine quarters in April-June, while strong retail sales led to a 66 per cent surge in revenue.

Meanwhile, Tata's revenue from passenger vehicles, mostly through sales in India, rose 11 per cent. However, that was slower than the 15 per cent growth in the previous quarter, with a price hike in the latest quarter likely offsetting the strong domestic demand.

Tata, which makes India's top-selling sport utility vehicle, Nexon, has raised prices three times this year but is "not looking at any major price hikes," group chief financial officer PB Balaji said in a media call.

Balaji said passenger vehicle demand is expected to be "robust" for the coming quarters. JLR's production though is expected to be lower this quarter due to an annual summer plant shutdown.

Separately, Tata Motors plans to cancel its 'A' ordinary shares in its latest move to simplify its securities structure.