What: Shares of Indian automaker Tata Motors (NYSE:TTM) surged on Tuesday. At noon EDT, the company's American depositary receipts were trading at $33.50 in New York, up over 12%.
So what: Tata reported its earnings for the quarter and fiscal year ended March 31 on Monday. Simply put, they were tremendous: Net income for the quarter tripled to 51.8 billion rupees ($771 million), blowing away Wall Street's 35.3-billion-rupee estimate.
A big chunk of that profit came from Tata's Jaguar Land Rover unit (JLR). JLR's profit jumped 56% to 472 million British pounds ($690 million), on continued strong demand for Land Rover's luxury SUVs and growing sales for Jaguar. Demand for Jaguar's new small XE sedan has been strong, helping to push JLR to a 28% overall year-over-year sales gain in the first quarter.
Now what: Tata is ramping up investment in its profitable and growing JLR unit. JLR expects to spend 3.75 billion pounds ($5.5 billion) on capital expenditures in the coming fiscal year, up from 3.3 billion pounds in the year ended March 31, to help fund new models, including an all-new Land Rover Discovery and Jaguar's first SUV, the F-Pace. Those new models are expected to give JLR, and Tata's bottom line, another boost in the year ahead.
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