Tata Motors turns to profit on cost cuts at Jaguar

Tata Motors Ltd., the Indian truckmaker that owns Jaguar Land Rover, turned to a profit in the second quarter after it cut costs at the luxury car unit and earned returns from investments in group companies.

The consolidated net income in the quarter ended Sept. 30 was 217.8 million rupees ($4.6 million), compared with a net loss of 9.42 billion rupees a year earlier, the Mumbai-based company said in a statement today. Sales fell 8.5 percent to 208.9 billion rupees.

Chairman Ratan Tata, 71, has hired two companies to help cut costs at the U.K.-based unit after the global financial meltdown reduced demand for luxury products. Jaguar Land Rover, which cut 2,200 jobs over a year, said in September it may close one of two factories in England's West Midlands.

"The worst is certainly over for Tata Motors," said Jatin Chawla, a Mumbai-based analyst at India Infoline Ltd. "The environment has stabilized for Jaguar Land Rover and the cost- cutting measures have also helped."

Tata Motors sold 44,300 units of Jaguar cars and Land Rover sport-utility vehicles in the July-September quarter compared with 35,900 in the April-June period, C. Ramakrishnan, chief financial officer, said in Mumbai. The unit narrowed its net loss in the second quarter to 60 million pounds ($98.4 million) from 240 million pounds a year ago, he said.

The company earned a profit of 196.9 million rupees from investments in associate companies, compared with a loss 77.1 million rupees a year ago, it said in a statement.

Tata Motors fell 0.7 percent to 629.25 rupees in Mumbai trading today. The stock has almost quadrupled so far this year and is the best performer in the benchmark 30-stock Sensitive Index of the Bombay Stock Exchange.