Tata's profit dented by drop in Jaguar Land Rover's Chinese sales
NEW DELHI (Reuters) - Tata Motors reported on Thursday strong sales by its British Jaguar Land Rover subsidiary in Europe and North America in the last three months of last year, offsetting a drop in China, once its fastest-growing market.
Retail sales by JLR, which has been rapidly expanding its model line-up and volumes with new production planned in Europe and South America, were up nearly 50 percent in the UK, continental Europe and North America on the same period in 2014, while sales fell 10 percent in China, where economic growth is cooling.
Overall, India's top automaker reported a better than expected 2 percent fall in net profits for the period, its fiscal third quarter, to 35.08 billion rupees (£356.7 million). Analysts on average had expected Tata to report a net profit of 27.61 billion rupees, according to Thomson Reuters data.
Net sales in the quarter were up 4 percent at 716.86 billion rupees, while the operating profit margin at JLR rose to 14.4 percent from 12.2 percent in the preceding quarter, but was still down from nearly 20 percent in earlier quarters.
Local production of Range Rover Evoque and Discovery Sport SUVs in China and non-recurrence of an annual tax rebate in the country lowered margins, JLR said in a statement.
The company also reported an exceptional gain of 30 million pounds ($43 million) from insurance claims on the damage caused by a chemical explosion at Tianjin port in China last year which wrecked thousands of its cars, and expects more claims to be paid over the coming months.
Meanwhile losses in Tata's domestic business narrowed to 2.01 billion rupees in the quarter helped by strong demand for its trucks in the country, where economic growth is reviving, compared with a loss of 21.23 billion rupees in the year ago period.
Shares in Tata Motors ended down by more than 5 percent in a weak Mumbai market <.BSESN>.
($1=68.2125 Indian rupees)
($1 = 0.6920 pounds)
(Reporting by Aditi Shah; Editing by Greg Mahlich)
