Jaguar Land Rover volumes rise

By Pratish Narayanan

MUMBAI (Reuters) - Tata Motors (TAMO.BO), India's top vehicle maker, on Friday posted an unexpected September quarter consolidated net profit, aided by investment returns and strong volume growth from its Jaguar Land Rover unit.

Jaguar Land Rover (JLR) saw sales volume rise 23 percent from the previous quarter, and Tata Motors said there were signs of improved demand for other key units after a global slump in the auto sector.

"It is a surprise result. We did not expect the turnaround to happen so fast. Prima facie, it looks like the volume growth they had in the quarter and better pricing must have led to this," said Surjit Arora, auto analyst with Prabhudas Lilladher.

New JLR products such as the upgraded Land Rover, Range Rover Sports and Discovery 4 were getting a good reception and aggressive cost reduction had also paid off, Tata Motors said.

"The business is witnessing some stability in the external environment with certain key markets showing signs of recovery," it said in a statement.

JLR made an operating profit of 41.3 million pounds in the quarter, but with debts of 90 billion rupees (1.18 billion pounds) it made a net loss of 60 million pounds in Tata's fiscal second quarter of the 2009/10 year.

Ahead of the results, Citi said it expected JLR to become profitable at the operating profit level by the fiscal third quarter, through cost cutting initiatives and better pricing.

IMPROVING SALES