After JLR, Tata Motors Shares Plummeted 19.8% in Intra Trading

Confidence of Tata Motors’ investors blighted on Tuesday when the company’s shares dived to 19.8% low propelling the company to wind up the business at its West Midland plant.

Following Jaguar Land Rover footsteps which accorded a low of 12.3% in its share prices, Tata Motors shares demand slumped at the global sales.

Last time the shares of Tata Motors recorded such headlong fall was in 2011. This plunge of 19.8% in intraday trading amounts to Rs 170.65 a share low. At 12.49pm, the scrip was trading at Rs 175.90 on the BSE, down 18% from its previous close. So far this year, Tata Motors has dropped over 60%.

JLR reported retail sales at 57,114 cars in September, down 12.3% from a year ago. Its sales were down a modest 0.8% in the UK and 4.7% in Europe. In North America, sales were 6.9% lower.

JLR reported retail sales at 57,114 cars in September, down 12.3% from a year ago. Its sales were down a modest 0.8% in the UK and 4.7% in Europe. In North America, sales were 6.9% lower.

The company said it would stop production at the Solihull plant in the UK for two weeks. The plant has 9,000 staff after cutting 1,000 temporary workers this year.

JLR’s free cash flow fell significantly during 2017-18 to negative £1 billion (about 4.2% of sales), with Fitch expecting this metric to fall further to about -6% by the end of the current financial year.

The company has not yet announced its earnings date for the September quarter. However, according four Bloomberg analyst estimates, Tata Motors may report a consolidated loss of Rs 39.10 crore while revenues will be Rs 69,643.70 crore. On a standalone basis, it may report a profit of Rs 20.10 crore while sales will be Rs 30,754.10 crore.

“The company is likely to report 445 bps YoY margin contraction owing to lower scale in JLR and commodity inflation. JLR’s EBITDA margin would contract 374 bps YoY (+184 bps QoQ) to 8.2% led by negative operating leverage,” said HDFC Securities in 8 October report.