1. Tata Motors shares continue falling on surprise plunge in Q3 net profit

Tata Motors shares continue falling on surprise plunge in Q3 net profit

Tata Motors was trading down 8.42% at Rs 445.8 on BSE, extending the yesterday's fall of 3.7% after the company reported that its fiscal third quarter net profit fell by a shocking 96% on-year.

By: | Published: February 15, 2017 9:41 AM
Tata Motors was trading down 8.42% at Rs 445.8 on BSE, extending the yesterday's fall of 3.7%. Tata Motors was trading down 8.42% at Rs 445.8 on BSE, extending the yesterday’s fall of 3.7%.

Tata Motors’ shares continued their plunge to open down 7.8% on Wednesday, extending the yesterday’s fall of 3.7% after the company reported that its fiscal third quarter net profit fell by a shocking 96% on-year.

Tata Motors was trading down 8.42% at Rs 445.8 on BSE. The benchmark BSE Sensex was flat at 28,336.64 points despite Tata Motors and Tata Motors DVR pulling it down, with Adani Ports, ITC and ONGC providing it some support.

Earlier yesterday, Tata Motors said that its fiscal third quarter net profit fell by a baffling 96% on-year to Rs 112 crore, as weak JLR performance and big domestic business loss ate into the operating profits and bottomline, against expectations. Its actual Oct-Dec net profit was minuscule compared to the Reuters’ analyst poll estimate of Rs 2,248 crore, and ET Now poll estimate of Rs 2,635 crore.

All the other major financial metrics except for the consolidated revenue fell way short of estimates. Its consolidated EBITDA (earnings before interest tax depreciation and amortisation) at Rs 5,161 crore was lower than ET Now poll of Rs 8,600 crore, while the consolidated operating margin was at a mere 7.7% against the expected 12.8%.

JLR earnings were the major drag on consolidated results. The luxury car unit reported an EBITDA of GBP 611 million vs ET Now poll estimate of GBP 910 million, while its operating margin at 9.3% was sharply lower than the 14% expected by the analysts.

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Jaguar Land Rover recorded lower wholesale volumes and relatively weaker product mix (including the run out of Discovery), and overall higher marketing expenses,” Tata Motors said in a statement.

Today morning, news agency reports said that Soros Fund Management has picked up 75,000 shares in sponsored ADRs in Tata Motors.

Tata Motors said that its M&HCV segment (medium & heavy commercial vehicles) shrunk while LCV segment (light commercial vehicles) results were flat. “During the quarter, commercial vehicle segments of the company witnessed demand shrinkage due to the demonetisation. M&HCV segment witnessed major pressure with a fall of 9% on-year,” Tata Motors said.

However, car segment grew, partially offsetting the commercial vehicles performance, it said. “Passenger vehicles segment grew by 25.4% on-year with car segment growth of 31.1% on-year on the back of continued strong response to the Tiago,” Tata Motors said, adding that exports grew by 34.6% on-year.

 

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