Tata Motors shares fall as JLR wholesale volumes disappoint, JPMorgan downgrades stock
1 min read 10 Oct 2022, 11:38 AM ISTTata Motors shares declined around 5% to ₹393 apiece on the BSE in Monday's early deals
PremiumShares of Tata Motors Ltd declined around 5% to ₹393 apiece on the BSE in Monday's early deals after the automaker reported lower-than-expected wholesale volumes for its Jaguar Land Rover (JLR) business, and global brokerage JP Morgan downgrading the auto stock.
Tata Motors' Jaguar Land Rover (JLR) wholesale volumes (excluding its joint venture in China) were 75,307 for the second quarter, while it had in August, projected wholesale volumes to be around 90,000. The automaker, among the largest in the country, blamed lower-than-expected supply of specialised chips from one supplier for failing to meet its target. However, it said new deals with semiconductor suppliers would lead to improved sales in the second half of the fiscal year.
"We would need more clarity on the pace of production recovery at Jaguar Land Rover to turn constructive on the stock," said JPMorgan in a note while downgrading the Tata Motors' shares rating to ‘neutral’ from ‘overweight’ and cutting its target price to ₹455 (from ₹525).
Tata Motors' total domestic sales increased by 44% to 80,633 units in September. The company had dispatched 55,988 units to dealers in September 2021. The Mumbai-based automaker reported an 85% increase in its total domestic passenger vehicle dispatches at 47,654 units last month against 25,730 units in September 2021.
Tata Motors Passenger Vehicles Managing Director Shailesh Chandra said the company attained its highest ever monthly sales of 47,654 last month led by record sales of Nexon and Punch. "With the recent launch of the Tiago EV, the company has opened new vistas and is poised to drive the mass adoption of EVs across the country. Going forward, we expect the festive season will witness strong retail on the back of improving the supply of vehicles," he added.
Tata leads India's EV market, helped by government subsidies and high tariffs on imports and the company intends to expand its electric PV portfolio from 3 EVs at present to 10 by FY26. Tiago EV is targeting existing EV customers who are looking for a smaller car with premium features.
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