Shares of Tata Motors plummeted significantly on Wednesday amid fears of a global recession. The shares of Tata Motors fell 11.5 per cent to Rs 109.55 per share on rating downgrade by the rating agencies.
Shares of Tata Motors plummeted significantly on Wednesday amid fears of a global recession. The shares of Tata Motors fell 11.5 per cent to Rs 109.55 per share on rating downgrade by the rating agencies. At 2:40 PM on BSE, the shares of Tata Motors were trading at Rs 112.40 per share, down 9.21 per cent from the previous close. CARE Ratings on Monday downgraded Tata Motor’s long term credit rating owing to weak quarterly results by its subsidiary Jaguar Land Rover or JLR.
CARE Ratings downgraded the rating on the long-term bank facilities of Tata Motors (TML) to ‘AA-/Negative’ from ‘AA/Stable’, but reaffirmed rating on short term bank facility and commercial paper at ‘A1+’. JLR’s retail sales volume remained subdued and posted a yearly decline of 5.8 per cent in the fiscal year 2018-19 and 11.6 per cent in the quarter ended June 30 of FY20 on account of weak consumer demand amid uncertainties around diesel vehicles in Europe and slowdown in China.
The issue of Brexit along with US likely imposing tariffs on vehicle imports and a slowdown in China and uncertainties revolving around diesel powertrain is likely to strain JLR volumes in the medium term, according to CARE Ratings.
The Mumbai-based auto major reported a net loss of Rs 3,680 crore in the Apr-Jun quarter as compared with a loss of Rs 1,863 crore in the same period of last year. The consolidated revenue from operations declined 8 per cent on-year and 29 per cent sequentially to Rs 60,830 crore. The commercial vehicle and passenger vehicle businesses posted Q1FY20 revenue of Rs14,309 crore, as against Rs 17,290 crore a year ago. Meanwhile, JLR’s Q1FY20 revenue fell to Rs 45,661 crore from Q1FY19 revenue of Rs 48,215 crore.