JLR profit growth stalls on Evoque's growing share of sales

The lower-priced Evoque SUV, pictured, accounted for almost 30 percent of Land Rover's wholesale deliveries in the first two quarters.

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MUMBAI (Bloomberg) -- Jaguar Land Rover said fiscal third-quarter profit growth probably stalled because of currency shifts and its cheaper Evoque model attracting a higher share of buyers.

Earnings before interest, taxes, depreciation and amortization in the three months through December probably about matched figures for the previous two quarters, and the margin on sales was probably "slightly lower," the company said Wednesday in a U.S. filing.

Jaguar Land Rover's margins declined in the two earlier quarters, according to data compiled by Bloomberg.

The Ebitda performance reflects "less favorable exchange rates" and "the ongoing effect of a higher mix" of sales of the SUV, the manufacturer said.

The lower-priced Evoque SUV accounted for almost 30 percent of Land Rover's wholesale deliveries in the six months ended Sept. 30.

The SUV, which began deliveries in September 2011, sells for just under 29,200 pounds ($46,300), versus the 38,825-pound starting price for Land Rover's Discovery 4, a larger SUV, according to the brand's Web site.

"The company saying that margins will be lower is a big concern," said Umesh Karne, an analyst with BRICS Securities Ltd. in Mumbai. "The indication that capital expenditure will be higher as well as about negative cash flow is a concern, as we factored positive cash flows into the share price."

Jaguar Land Rover may have negative free cash flow in the year beginning April 1 as the unit raises annual capital spending to 2.75 billion pounds from 2 billion pounds to develop models and build a factory in China.

Free cash flow was probably also negative in the third quarter, the unit said. The luxury division of India's Tata Motors, which has 2.18 billion pounds in cash, may raise additional funds for investments from capital markets and through bank loans, it said.

Detailed fiscal third-quarter figures will be released with Tata Motors' earnings statement in February, the division said.

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