Tata Motors Ltd, India's largest vehicle maker, beat forecasts as profits more-than- doubled on improved margins due to lower input prices and a recovery in demand as the financial crisis loosened its grip.

The recovery was also aided by lower foreign exchange loss of 150 million rupees compared with 2.45 billion rupees a year ago.

Volume recovery combined with improved realizations contributed to growth in revenues while stable material prices and accelerated cost reduction efforts continued to yield beneficial impact on margins, the company said in a statement.

Tata Motors, which owns the luxury Jaguar and Land Rover brands and also builds the Nano, the world's cheapest car, said its margins had gone to 13.4 percent, up 580 basis points from a year ago.

After a dismal 2008/09, sales of vehicles are picking up again in India with lower interest rates and improved consumer sentiment. Industry-wide sales are expected to grow by double-digits in the year to end March -- one of the few bright spots in a global industry struggling to emerge from its worst ever downturn.

Tata Motors has seen slower growth in car sales in half-year to September compared to leading car maker Maruti Suzuki and the Indian unit of South Korea's Hyundai Motors.

However, Tata is expecting sales to pick up with its recently launched Manza sedan, which will replace the basic version of the premium Indigo.

Tata Motors, which has about 60 percent share of the world's fifth-biggest truck and bus market, reported a net profit of 7.29 billion rupees ($156.4 million) in the quarter to September, from 3.47 billion rupees a year earlier.

A Reuters poll of 11 brokerages forecast net profit to rise nearly a fourth to 4.3 billion rupees on net sales of 76.8 billion rupees.

Total income rose 13 percent to 79.79 billion rupees as sales in the crucial Indian festive season bounced back from a weak year ago period, when the global financial crisis was taking hold.

The figures are standalone and do not include that of its British units Jaguar and Land Rover.

Maruti, in which Japan's Suzuki Motor Corp holds a 54.2 percent stake, on Saturday reported a 93 percent rise in September quarter net profit but warned that margins could come under pressure from a rise in input costs.

Tata Motors, which ended the June quarter with a consolidated debt burden of 240 billion rupees ($5.2 billion), is trying to deleverage its balance sheet.

Earlier this month it raised $750 million through a combination of Global Depositary Receipts and convertible bonds, which would just about wipe out the $3.2 billion loan it took to acquire Jaguar and Land Rover from Ford Motor Co in 2008.

But the company is still in the market to raise more funds to sustain the operations of JLR.

Ahead of the results, shares in Tata Motors, worth $5.7 billion, closed up 1.9 percent at 539.35 rupees, while the main index .BSESN fell 0.4 percent.

Its shares more than doubled in the September quarter, outperforming a 18.2 percent rise in the main index and a 46.2 percent rise in the sector index .BSEAUTO.

(Writing by Prashant Mehra; Editing by Jarshad Kakkrakandy)