Tata Motors share price declines 3% as supply constraints hit JLR Q2 wholesales; analysts cut estimates

  • Stock Market Today: Tata Motors share price remains in focus after the company said JLR wholesales in Q2 FY25 stood at 87,303 units, down 10% year-on-year. The decline is attributed to supply constraints.

Ujjval Jauhari
Published8 Oct 2024, 09:35 AM IST
Stock Market Today: Tata Motors share price declines as JLR wholesales get impacted by supply constraints
Stock Market Today: Tata Motors share price declines as JLR wholesales get impacted by supply constraints

Stock Market Today: Tata Motors share price declined 3% in the morning trade on Tuesday, October 8, following a drop in wholesale sales of Jaguar Land Rover (JLR) during the September quarter of financial year 2024-25 (Q2 FY25).

Tata Motors share price opened at 918.10 on the BSE today, more than 1% lower than its previous close of 928.10. Tata Motors share price thereafter declined to 893.90, marking a correction of over 3%

Supply constraints impact production, wholesales

Tata Motors in a release on Monday said that JLR wholesales in Q2 FY25 stood at 87,303 units, down 10% year-on-year (YoY). Analysts attributed the decline to supply constraints.

Also Read | Stock market today: 5 stocks to buy or sell on Monday— Oct 8

Production of Jaguar Land Rover, a subsidiary of Tata Motors, was limited to 86,000 units (down 7% YoY), primarily due to supply disruptions from a key high-grade aluminium supplier, which impacted several original equipment manufacturers (OEMs).

Furthermore, around 6,500 vehicles, mostly in the UK and European region, were placed on a temporary hold at the end of September to allow additional quality control checks to be performed, the company said in a filing.

Also Read | Indian Hotels, EIH among others rise up to 56% YTD. Time to buy, sell or hold?

Furthermore, the retail sales stood at 103,108 units in the second quarter (including the Chery Jaguar Land Rover China JV), down 3% compared to the same quarter a year ago.

However, JLR expects both production and wholesale volumes to improve and pick up strongly in the second half of the financial year with the normalisation of the aluminium supply situation. On the positive side, the overall mix of the most profitable Range Rover, Range Rover Sport and Defender models was 67% of total wholesale sales.

Also Read | NMDC share price falls another 8%, down 15% in 5 sessions. Here’s why

Analysts cut Q2 estimates

Based on the above Q2 wholesale volumes for JLR, analysts at Motilal Oswal Financial Services (MOFSL) tweaked their Q2 FY25 revenue, earnings before interest tax depreciation and amortisation (EBITDA), and net profit estimates for JLR by 5.8%, 3.03% and 8.2%, respectively.

Their Q2 FY25 estimates for consolidated revenue, EBITDA and net profit now stand at around 96,240 crore, 12,950 crore and 404 crore, which are lower by around 4%, 2.4% and 5.3%, respectively compared to the earlier estimates.

Near-term challenges

While Tata Motors posted a robust performance in FY24, analysts remain watchful as they see near-term headwinds.

Motilal Oswal Financial Services expects JLR margins to remain under pressure over FY24-FY26, given the rising cost pressure as it invests in demand generation, normalising mix, and EV ramp-up, which is likely to be margin-dilutive.

Indian passenger vehicle sales remain strong but industry demand has been moderating . The demand for commercial vehicle sales remains moderate as per analysts. Analysts at MOFSL have, therefore, factored in flat margins for the Indian business over FY24-26.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

 

 

 

 

 

 

 

 

 

 

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:8 Oct 2024, 09:35 AM IST
Business NewsMarketsStock MarketsTata Motors share price declines 3% as supply constraints hit JLR Q2 wholesales; analysts cut estimates

Most Active Stocks

Tata Motors share price

784.95
03:56 PM | 12 NOV 2024
-19.8 (-2.46%)

Tata Steel share price

144.15
03:56 PM | 12 NOV 2024
-0.8 (-0.55%)

Tata Power share price

414.25
03:56 PM | 12 NOV 2024
-17.25 (-4%)

Oil & Natural Gas Corporation share price

256.20
03:55 PM | 12 NOV 2024
-0.7 (-0.27%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Fortis Healthcare share price

638.50
03:29 PM | 12 NOV 2024
14.6 (2.34%)

Coforge share price

8,099.00
03:45 PM | 12 NOV 2024
35.6 (0.44%)

HCL Technologies share price

1,862.90
03:29 PM | 12 NOV 2024
-4.1 (-0.22%)

Federal Bank share price

207.15
03:53 PM | 12 NOV 2024
-0.6 (-0.29%)
More from 52 Week High

ITI share price

295.15
03:51 PM | 12 NOV 2024
-32.25 (-9.85%)

Jyothy Labs share price

441.65
03:55 PM | 12 NOV 2024
-35.7 (-7.48%)

Whirlpool Of India share price

1,789.90
03:29 PM | 12 NOV 2024
-141.5 (-7.33%)

Britannia Industries share price

5,028.25
03:56 PM | 12 NOV 2024
-397.05 (-7.32%)
More from Top Losers

Uno Minda share price

1,002.75
03:48 PM | 12 NOV 2024
80.45 (8.72%)

Jubilant Foodworks share price

636.30
03:29 PM | 12 NOV 2024
34.45 (5.72%)

The Ramco Cements share price

910.25
03:40 PM | 12 NOV 2024
40.3 (4.63%)

Macrotech Developers share price

1,241.65
03:44 PM | 12 NOV 2024
52.9 (4.45%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    77,305.00-1,470.00
    Chennai
    77,311.00-1,470.00
    Delhi
    77,463.00-1,470.00
    Kolkata
    77,315.00-1,470.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.92/L0.00
    Chennai
    100.80/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.77/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts