February 8, 2019
The Tata Motors share price tanked in early trade after the homegrown auto firm reported a consolidated net loss of Rs 26,960.8 crore for the third quarter ended December 31, hit by asset impairment in its British arm Jaguar Land Rover (JLR). That’s a huge decline compared to net profit of Rs 1,214.6 crore in the October-December quarter of 2017-18. The Tata Motors share price tanked to a fresh 52-week low of 141.90, down 22.41% or 41 points compared to the previous close of 182.90. Later, the Tata Motors share price fell 14% to 156.60 on the BSE.
The Tata Motors share was the top Sensex and Nifty loser in early trade. On Nifty, Tata Motors stock fell 15.64% to 154.25 level.
The Tata Motors share price was trading below its 50-day and 200 day moving average of 177.14 a and 207.30 level, respectively.
24 of 38 brokerages rate the Tata Motors share “buy” or ‘outperform’, 11 “hold”, two “underperform” and one “sell”, according to analysts’ recommendations tracked by Reuters.
Profit took a hit due to an exceptional item of asset impairment in its British arm Jaguar Land Rover (JLR) of Rs 27,838 crore (3.1 billion pounds), the Indian automaker said.
However, total revenue from operations, rose 4.36 per cent to Rs 77,582.71 crore as compared to Rs 74,337.7 crore in the year-ago period, Tata Motors said.
On a standalone basis, the company posted profit after tax (PAT) of Rs 617.62 crore as against Rs 211.59 crore in the year-ago quarter.
Also read: No deal Brexit will force 3-weeks JLR plant shutdown in April, profitability to be hit: Tata Motors
Total standalone income rose to Rs 16,477.07 crore as against Rs 16,186.15 crore in the same period of previous fiscal.
Tata Motors expects the EBIT (earnings before interest and tax) margin for the fiscal year 2018-19 ending March 31 to be “marginally negative” compared with an earlier guidance of breaking even, Chief Financial Officer, PB Balaji said. The reduction in profit margin outlook also took a toll on the Tata Motors share price in trade today.
JLR’s revenue, however, declined 1 per cent to 6.2 billion pounds.
Jaguar Land Rover (JLR) posted a pre-tax loss of 273 million pounds in its latest financial results and blamed a fall in sales of its luxury vehicles on challenging market conditions in China.
The UK’s largest car manufacturer reported revenues of 6.2 billion pounds, down from 6.3 billion pounds a year ago, as part of the results for the October-December 2018 three-month period. The sales of its cars for the quarter stood at 144,602 vehicles, down from 154,447 a year ago.
On Wednesday, credit ratings agency Fitch Ratings said it has placed the credit rating of the Tata Group firm on negative watch, stating increasing risks for its British luxury car unit – Jaguar Land Rover (JLR) – over a potentially chaotic Brexit.
The development comes after the ratings agency placed the credit ratings of JLR, Britain’s biggest carmaker, under review for possible downgrades.
Tata Motors share price on Thursday settled 2.64 per cent higher at Rs 182.90 on the BSE. Meanwhile, the Sensex fell 212 points to 36,758 and Nifty lost 56 points to 11,012 in early trade.