India’s Tata Motors (NYSE:TTM) sees share price slump after reporting soaring profit and a spike in revenue for the second quarter of the financial year.
The parent company of UK based Jaguar Land Rover announced a 195% year-on-year increase of consolidated net profit for the quarter, up to 25 billion rupees ($383 million) from 8.5 billion rupees ($130 million).
This hurtled past analysts’ expectations of 15 billion rupees, according to Thomson Reuters data.
The main driver behind the far better than expected profit was due to a strongly performing Jaguar Land Rover. Profit before tax for the UK subsidiary was up 38% to £383 million.
Sales of Jaguar and Land Rover may continue to prop up the financials of the group as they push forward with plans to add to their production line. They plan to launch several new cars in the next year, including two new SUVs, the XF Sportbrake and the E-Pace, as well as the I-Pace, the company’s first electric sport car.
However, the source of future sales growth is unlikely to be the UK as spending may dip due to economic uncertainty.
Jaguar Land Rover CEO, Ralf Speth, said that “we know that overall the economies are stronger around the world but it’s also clear that we see, one or the other, weakness from a political side, from an economy side. Think about Brexit, think about the U.S. at the current moment,”
The CEO did try to rouse optimism about the businesses health as he also said that he expects growth in the Chinese market to offset this.
Further to this global sales, in units, increased 11.7% compared to the third quarter in the previous year, and was up 4.3% for the first six months of the financial year.
Revenue also rebounded in the second quarter as it was up 8.5%, but has fallen 0.6% for the first half of the year.
The firm’s earnings per share nearly tripled year-on-year, from $0.04 to $0.11.
Despite this seemingly strong performance, Tata Motors’ share price has slipped, down 2.6% to $32.81, at the time of writing.