Tata Motors surges after profit beats estimates

Tata Motors rose to its highest intraday level in almost a year after sales gains in Europe and China helped triple its profit.

New Delhi - Tata Motors rose to its highest intraday level in almost a year after Jaguar Land Rover sales gains in Europe and China helped triple its profit, beating analyst estimates.

Shares gained as much as 10 percent to 463.90 rupees, the highest intraday price since June 3, 2015. They traded up 9.4 percent as of 9.32am in Mumbai trading. The stock was the best performer on the benchmark S&P BSE Sensex, which advanced 0.3 percent.

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Jaguar Land Rover Chief Executive Officer Ralf Speth said China is “coming back” and the automaker is optimistic about global economic growth as it invests in new products. The luxury-vehicle unit said it’s ramping up sales of the Jaguar brand’s F-Pace crossover, XE sedan in the United States, XF’s long wheelbase in China and will introduce Land Rover’s Evoque Convertible sport utility vehicle in the coming months.

“The Jaguar plan has worked like clockwork so far, supporting margins and profits, and we expect the F-Pace to drive significant earnings growth as volumes ramp up,” Robin Zhu and Yang Liu, analysts at Sanford C. Bernstein, wrote in a report, maintaining their outperform rating on the stock. With new models including the Discovery “on the runway, and the pound remaining supportive, we remain convinced that Tata/JLR will grow earnings beyond expectations”.

Tata Motors’ net income tripled to 51.8 billion rupees ($771 million) in the quarter ended March 31, compared with the 35.3 billion-rupee average of analysts’ estimates compiled by Bloomberg.

Profit at the Jaguar Land Rover unit increased 56 percent to 472 million pounds ($690 million).

BLOOMBERG