Tata Motors, part of India’s salt-to-software Tata conglomerate, whose range includes utility vehicles and the ultra-cheap Nano, said revenue rose, driven by British luxury brands Jaguar and Land Rover, which it bought from Ford Motor Co. for $2.3 billion in 2008.

But the rising costs of steel, rubber and other raw materials have squeezed margins and forced some Indian carmakers, including Tata and Maruti Suzuki , to raise prices.

India has raised interest rates 11 times since March 2010 to combat stubborn inflation, hurting industries based on credit. The Indian auto industry is spurred by an aspirational middle class that relies on loans to buy cars. It targets families of four that ride on motorcycles, a common sight on Indian roads.

But even the world’s cheapest car failed to lure buyers in July. Tata’s sales fell in July, led by a slump in sales of the Nano, which slid 64 percent.

Overall car sales in India fell 15.8 percent in July, the first drop in two and a half years, and higher interest rates and car prices are expected to hurt demand over the next few months.

LAGS FORECAST

Tata posted first-quarter net profit of 19.99 billion rupees, compared with 19.89 billion a year earlier.

Tata Motors’ consolidated revenue rose 24 percent from a year earlier to 335.72 billion rupees. A Reuters poll had forecast net profit of 21.6 billion rupees for the quarter on net sales of 329.1 billion.

Tata spent 203.9 billion rupees on consumption of raw materials in the quarter compared with 148.5 billion rupees a year earlier.

In June, India’s top carmaker Maruti Suzuki beat estimates with an 18-percent rise in its fiscal first quarter net profit, but posted a 25-percent drop in July sales.