India's largest automobile manufacturer, Tata Motors Ltd., said Monday its profit rose 36 per cent in the most recent quarter as sales growth offset higher raw material costs.
The growth in sales and exports helped push Tata's net earnings to 5.36 billion rupees (US$119.2 million) for the July-September quarter, up from 3.9 billion rupees ($87.4 million) the same quarter a year ago.
Net sales climbed 37 per cent to 65.72 billion rupees ($1.46 billion) in the fiscal second quarter from 47.88 billion rupees the previous year, helped by the sales of more cars, utility vehicles, trucks and buses.
Tata sold 266,098 vehicles in the first half of the fiscal year, up 37 per cent from 194,558 vehicles in same period the year before, the company said in a written statement.
The automaker also saw its exports grow by 18 per cent to 27,224 vehicles during the second quarter of the 2006-2007 fiscal year, up from 23,067 vehicles during the same July-September quarter of the previous fiscal year that runs April 1 to March 31.
Despite the improving numbers, the company said throughout the quarter it grappled with higher materials prices, rising interest rates and general inflationary pressures _ trends that are expected to continue for the rest of the fiscal year.
``But thanks to the cost reduction that we achieved ... we could still maintain our (operating) margins at around 11.5 per cent,'' Tata Motors' chief financial officer, Pravin Kadle, told reporters.
The numbers released Monday conformed to Indian accounting standards. Numbers that meet U.S. accounting standards were not released.
The company, set up in 1954 and now listed on the New York Stock Exchange, reported its market share had improved across all its product ranges, from trucks to compact cars.
Its share in the domestic commercial vehicle market grew from to 65 per cent, compared with 58 per cent the previous year. In the passenger vehicle segment, the company's market share grew to 16 per cent, compared to 15.8 per cent in the previous year.
Tata Motors is part of the Tata group, one of India's leading business conglomerates with interests spanning steel, software services, hotels, chemicals, insurance and asset management, among others.