BOMBAY (Reuters) - Tata Motors, India's largest truck maker, said on Thursday its third-quarter profit nearly tripled, meeting expectations as local sales boomed in a surging economy, but it added exports will be key to its future.
The company, which is also the largest bus maker and third largest maker of cars and utility vehicles, saw its operating margin rise by more than a percentage point from a year earlier, which it attributed to robust volume growth and cost control.
"We are going strong on our international business to offset cyclical downturns in domestic truck sales," Ravi Kant, executive director at Tata Motors, told a news conference.
Tata's domestic truck sales, like those of rival Ashok Leyland, which reports on Friday, surged as an economic recovery and the government's huge cross-country highway project fueled demand.
Like India's top carmaker Maruti Udyog Ltd., an affiliate of Suzuki Motor Corp., Tata Motors has seen car sales grow handsomely as consumers tapped cheap finance.
But exports by volume in the past quarter, though still slightly less than a tenth of total sales, nearly quintupled from a year earlier as the company made inroads into overseas markets.
The company, part of India's second largest business group, the Tatas, posted a net profit of 2.11 billion rupees ($46.4 million) in its fiscal third quarter to Dec. 31, up from 757.10 million rupees a year earlier and versus the median estimate of 2.03 billion in a Reuters poll released last week.
Total income rose 56 percent to 34,149.20 billion rupees.
Truck and bus sales in the past quarter rose 47 percent to 40,495 units, while car and utility vehicle sales increased 38 percent to 30,243 units.
Tata Motors is snapping at the heels of Hyundai Motor Co.'s Indian unit, the nation's second-largest carmaker, with the rising popularity of its low-priced Indigo sedan launched in December 2002.
Domestic sales of Tata's other car, the Indica, have plateaued, but exports are rising.
It sold about 4,000 cars to MG Rover Group Ltd. in the past quarter as part of a deal to sell 100,000 Indica hatchbacks to the British company over the next five years starting this April.
It expects to complete the acquisition of Daewoo's local truck unit in two to three months, which will allow it to make high tonnage vehicles, where sales are poised to grow in India and which can be exported to Asian markets.
It is also actively exploring partnerships in China and is in the process of selecting franchisees to make its buses in India and abroad.