OREANDA-NEWS. February 06, 2015. Tata Motors, India's largest car manufacturer, reported a 25.5 percent drop in quarterly net profit on Thursday as earnings from its luxury British unit fell and tax costs grew.

Consolidated net profit for the firm fell to 35.81 billion rupees (\\\$580.39 million) in the three-months-to December from 48.05 billion rupees a year ago.

Tata Motors, part of Tata's sprawling conglomerate ranging from tea-to-steel, dropped well below a profit forecast of 49.6 billion rupees by Bloomberg.

Consolidated revenue grew a tepid 9.6 percent to 699.73 billion rupees on-year in the quarter that ended in December.

The Mumbai-based firm pointed to increasing tax costs and falling profits at its British luxury marque JLR unit as the reason for the poor results.

Tata's tax bill climbed more than 63 percent to 21.40 billion rupees even although losses at its Indian operations rose to 21.23 billion rupees due to continuing weak sales.

JLR profits fell due to the "effect of unfavourable revaluation of foreign currency debt and hedges," C. Ramakrishnan, president and chief financial officer, told reporters.

Net profit at JLR fell to 593 million pounds (\\\$907.4 million) in the quarter from 619 million a year ago.

Tata Motors is now hugely reliant on the revenues from JLR, which it bought for \\\$2.3 billion from Ford in 2008 at the height of the global financial crisis.

The purchase, seen by auto analysts at the time as a risky gamble, has paid off dramatically with the iconic premium cars now driving Tata Motors' profits.