Tata Motors closes as top Nifty loser today: Here's why automobile major's share tanked around 4%

Tata Motors shares: Automobile major Tata Motors' share price tanked on Monday and it ended as a top Nifty loser. Tata Motors' share declined by nearly 4 per cent to Rs 396.55 and Rs 396 apiece on the NSE and BSE. The bearish sentiment in the stock was seen mainly due to lower-than-expected JLR sales during the second quarter of fiscal 2022-23.

Global brokerage firm JP Morgan had estimated the Jaguar Land Rover (JLR) sales to come around 90,000 in the July-September quarter, however, the auto heavyweight reported lower than expected numbers, Zee Business research analyst Ashish Chaturvedi said decoding the brokerage’s report.

Amid disappointing Jaguar Land Rover sales figures as per the company’s Q2 update, JP Morgan downgraded the stock from Overweight to Neutral slashing the target price to Rs 455 from 525. “The deleveraging time of JLR is not yet been completed, besides, wholesale figures have also come lower,” it said.

According to Tata Motors Q2 update, “Global wholesales for Jaguar Land Rover were 89,899 vehicles (**JLR number for Q2FY23 includes CJLR volumes of 14,592 units). Jaguar wholesales for the quarter were 16,631 vehicles, while Land Rover wholesales for the quarter were 73,268 vehicles.”

The company in its update further noted that the Tata Motors Group global wholesales in Q2FY23, including Jaguar Land Rover, jumped by 33 per cent year-on-year (YoY), while global wholesales of all passenger vehicles in Q2FY23 surged by 43 per cent YoY.

During Monday’s session, the share price of Tata Motors dipped almost 5 per cent to touch a day’s low of Rs 393  on both exchanges. This was near its 52-week low of Rs 366.05 touched on May 12, 2022, while it has hit a 52-week high of Rs 536.50 on November 17, 2021.

The stock has underperformed the market by declining over 4.5 per cent in the last one year as compared to around a 4 per cent fall in the Nifty50. As far as year-to-date is concerned, the counter has declined over 20 per cent against over a 2 per cent dip in the benchmark index.

Chaturvedi while analysing Nomura’s report said that this global brokerage’s view is intact on the stock and it has maintained a Buy rating with a target price of Rs 520 per share.