New Delhi, November 1:

Tata Motors Ltd, India’s largest automobile maker, said lower tax payments and improved margins helped its profit grow by 19 percent in the latest quarter despite a drop in the number of vehicles sold.

Tata Motors’ net profit grew to Rs 5.27 billion Indian Currency (IC) ($132 million) in the July-September quarter, up by 19.3 percent from Rs 4.41 billion IC in the same period last year, the company said.

Sales rose by 1.3 per cent to Rs 66.73 billion IC ($1.67 billion) in the fiscal second quarter. Profits grew faster than sales largely because the company paid much less in taxes during the quarter, according to data provided by the company.

Also, Tata Motors said it improved its operating margin to 12.4 per cent in the latest quarter from 11.5 per cent in the April-June period. Operating margin is the share of revenue remaining after all operational expenses are paid.

Most analysts had predicted the company’s profit to decline from a year ago, because of a slump in the automobile market. The Indian auto market has been hit in recent months by a sharp rise in interest rates.

Tata Motors shares rose as the earnings numbers came in, but fell in late trade to close at Rs 758 IC, down by 1.25 per cent from Tuesday. Tata makes cars, buses, trucks and utility vehicles. Most of its sales are in India, but the company also exports to markets in Africa, the Middle East, and elsewhere in Asia.

Domestic sales declined to 1.23 million units in the July-September quarter from 1.26 million a year ago. Exports dropped marginally to about 13,800 units.

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.