What happened

Shares of Tata Motors (TTM), an automaker in India, continued a post-earnings surge on Tuesday, as investors digested much-improved results from Tata's important Jaguar Land Rover (JLR) subsidiary.

As of 10 a.m. EDT today, Tata's American depositary shares were up about 14% from Monday's closing price.

So what

Tata's quarterly earnings report, released Friday, beat Wall Street's expectations thanks to a strong result from JLR, which posted a pre-tax profit of 156 million British pounds ($201.1 million), up sharply from a loss of 90 million pounds in the year-ago period. While overall deliveries were roughly flat from a year ago, JLR's revenue rose 8% to 6.1 billion pounds on improved product mix and a nice increase in sales in China.

A 2020 Land Rover Defender, an off-road SUV

New products have helped boost Land Rover's sales in China, driving revenue and profit improvements for parent Tata Motors. Image source: Jaguar Land Rover Ltd.

JLR accounts for roughly 85% of its parent company's revenue, so the impact of its results on Tata's top and bottom lines was good. Tata's overall loss for the quarter ended Sept. 30 narrowed to 2.17 billion rupees ($30.6 million) from 10.5 billion rupees in the third quarter of 2018, sharply beating analysts' estimates.

Now what

JLR is nearing the end of a restructuring effort that is expected to yield further year-over-year improvements in the next several quarters. Its CEO, Ralf Speth, said that investors can expect continued profitability and revenue growth thanks to cost reductions and an ongoing new-product effort.

JLR maintained its upbeat guidance for the fiscal year that will end on March 31, calling for a year-over-year increase in pre-tax profit and an operating margin between 3% and 4%.