Tata Motors shares plunge on record loss, Companies & Markets News & Top Stories

Tata Motors shares plunge on record loss, Companies & Markets News & Top Stories

Jaguar Land Rover posts its biggest ever quarterly loss of £3.4bn in the last quarter of 2018 as it adds a one-off £3.1bn write-down to a £273m loss.

Tata Motors launched the much-awaited Tata Harrier during the quarter while smaller SUV Tata Nexon achieved "5 star" Global NCAP rating for safety.

In China, demand has been adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.

"JLR's margin level is likely to be marginally negative during FY19".

Commenting on the results, N Chandrasekaran, Chairman Tata Motors said, "Domestic business continues the strong momentum and has delivered market share gains as well as profitable growth".

JLR now finds itself in a precarious position and faces a double whammy - poor sales in China, which has been its growth engine so far, and prospects of large scale disruption in the event of a hard brexit.

Tata Motors shares on BSE closed up 2.64% at Rs 182.90 in a flat Mumbai market on Thursday.

More news: Germany bans Facebook from combining user data collected from Instagram and WhatsApp

In a filing with the BSE, the automaker said its performance was impacted by challenging market conditions particularly in China and inventory corrections.

"We see a gradual improvement in China ahead, and expect our numbers stabilize and now we have to work on profitability for our dealers", Balaji said.

"Taking decisive actions to make the business "Fit for Future" by stepping up competitiveness, reducing costs and improving cash flows".

Land Rover sold 30,934 vehicles in the month, down 11.6 per cent year-on-year as strong sales of the refreshed Range Rover (up 60 per cent to 4,955) and Range Rover Sport (up 31.3 per cent to 7,122) were more than offset by the run out of the Evoque and lower sales of other models largely reflecting weaker demand in China. United States sales rose 20 per cent and 18 per cent in the UK.

According to Nitesh Sharma, an analyst at Phillip Capital, "we are concerned about the magnitude of equity erosion led by investment write off that could hurt debt covenants and lead to downgrades". To prepare for a scenario where there could be disruptions due to Brexit, JLR also plans to temporarily close plants in the United Kingdom from April this year. We maintain Buy as affordable valuation and high cyclicality in earnings keeps risk-reward favourable despite near-term uncertainty and headwinds.

Much of the firm's model range is now diesel-powered, while diesel sales in Europe have been falling. Stand-alone revenue grew 1.85% to ₹16,477 crore.

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