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Tata Motors Fall 5.5% After Surprise JLR Loss; Brokerages have Mixed Calls – India

By Aditya Raghunath — Tata Motors Ltd (NS:) shares ended May 19 at Rs 314.1, down 5.52%, after the company reported a Rs 7,585.35 crore loss for the March quarter of 2021. These losses were incurred as restructuring costs of Rs 15,000 crore for Jaguar Land Rover.

The number is lower than the March 2020 quarter that reported losses of Rs 9,863.75 crore.  Analysts had expected the company to post a net profit in the region of Rs 2,700 crore for this quarter.

Tata Motors expects Q1FY22 to be weak. It said, “While demand remains strong, the supply situation over the next few months is likely to be adversely impacted by disruptions from COVID-19 lockdowns in India and semi-conductor shortages worldwide.”

Brokerages have mixed views on the stock. Kotak Institutional Equities has a ‘sell’ call on the stock with a target price of Rs 205. It said, “JLR launches in the EV space is pretty late compared to the competition, which may lead to a market loss for JLR going forward. JLR is trading at a significantly higher multiple as compared to BMW.”

Goldman Sachs (NYSE:) is also negative on the stock. It has a sell call with a target price of Rs 254.

Citi is positive on Tata Motors and has a ‘buy’ call with a target price of Rs 395 while CLSA is even more bullish a price target of Rs 450.