Mumbai, Feb. 5: Tata Motors' net profit for the third quarter at Rs 3,581 crore fell far short of analysts' estimate of Rs 4,000 crore.

The company posted a consolidated net profit of Rs 3,581 crore in the quarter ended December compared with Rs 4,805 crore in the same period a year ago, a sharp decline of 26 per cent.

Tata Motors' consolidated performance was affected by its India business, which showed a loss of Rs 2,123 crore despite a higher net revenue of Rs 9,056 crore.

The company had posted a net revenue of Rs 7,770 crore in the year-ago period.

A higher replacement demand had pushed up the sales of medium and heavy commercial vehicles by nearly 43 per cent. A number of positive factors had pushed up sales such as positive economic sentiments, firm freight rates and improved freight availability.

Lower fuel prices and improved profitability of truck operators also supported replacement demand.

However, the light commercial vehicle sector continued to be affected by low transportation tonnage, vehicle over-capacity and constrained financing environment.

This affected overall commercial vehicle sales, which were down around 9 per cent over the last year.

However, in passenger vehicles, Tata Motors received a good response to the Zest, the compact sedan, and this led to the passenger vehicles sector showing a growth of 4.6 per cent.

Tata Motors said the loss before tax for the quarter was Rs 2,105 crore.

The company earned Rs 13 crore on the divestment of investment in a foreign subsidiary company to TML Holdings Pte, Singapore, a wholly owned subsidiary.

Further, the company provided Rs 310 crore to the carrying cost of buildings at Singur "because of uncertainty on the timing of the resolution of the legal case pending in the Supreme Court''.

Jaguar Land Rover, however, continued to report a robust performance with revenues during the quarter rising over 10 per cent to £5.88 billion (£5.33 billion).

The strong performance was driven by a wholesale volume increase and a richer product mix.