Strong demand for Jaguar Land Rover vehicles helped Tata Motors Ltd. more than double profit in its fourth-quarter results, overcoming continued sluggish performance in its domestic Indian market.
Increased sales in China in particular helped the Mumbai-based car arm of the $83-billion (U.S.) Tata group, which owns JLR, post profits of 62.3 billion rupees ($1.2-billion), an increase of 137 per cent from a year earlier.
JLR provided the vast majority of the overall group's profit increase, with the U.K.-based division registering an after-tax profit of £696-million ($1.1-billion), an increase of 167 per cent from a year earlier.
"We continue to see strong revenue growth and profit performance, with impressive growth in China and other developing markets," said C. Ramakrishnan, Tata Motor's chief financial officer.
But Mr. Ramakrishnan admitted that India's largest auto maker had not yet been able to turn around its struggling domestic division, where profit after tax fell 1.4 per cent to 5.6-billion rupees.
"Indian passenger cars continues to be a very challenging market, and we have seen soft sales this year," he said.
JLR's British sales continued their relative decline as the group's sales increased in emerging markets, boosted by sales of its Range Rover Evoque premium sport-utility vehicles.
JLR, which confirmed a joint venture with China's Chery Automobile Co. Ltd. in March to build vehicles in the world's largest automobile market, missed its target for China to become the group's second-largest market by volumes after Europe.
Chinese sales rose to 17 per cent of JLR's total, up from 11 per cent in 2011, compared with 23 per cent in Europe and 20 per cent in the U.K.
"We haven't achieved the overall target, by some minor numbers," said Ralf Speth, JLR chief executive officer. "China is still in position No. 3. But I'm quite sure if the dynamic continues this way, China will be No. 2 this year."
Mr. Speth also admitted that doubts remained over future sales in the group's largest European markets, given continuing uncertainties over the euro zone debt crisis and slow or negative growth in many European markets, a point echoed by analysts.
Hitesh Goel, car analyst at Mumbai brokerage Kotak Institutional Equities, said: "I am sceptical they are going to be able to achieve the kind of volume growth they have projected, in particular because European geographies are so weak, which is still where the largest percentage of their sales are."
Tata Motor's overall revenue rose to 509 billion rupees during the fourth quarter, an increase of 44.3 per cent from the year before. The company, which released its results after the Mumbai markets had closed, also confirmed a dividend of 4 rupees a share, unchanged from last year.