Tata Motors tanks 8% on JLR margins, UBS downgrade
Tata Motors stock took a beating both on NSE and BSE due to low margins by JLR. Although Tata Motors' quarter earnings aligned with market expectations, JLR's margins were disappointing.
Shares of Tata Motors got battered today because of lower Jaguar Land Rover (JLR) margins even as the company posted over two-fold jump in consolidated net profit at Rs 6,234 crore for the quarter ended March 31, 2012.
Experts said Tata Motors' March quarter earnings were in line with market expectations, but JLR margin was lower than estimates resulting in the massive slide.
Even brokerage house UBS cut its 12-month price target for Tata Motors to Rs 270 from Rs 320 maintaining its "sell" rating after the auto maker's weaker-than-expected operating earnings.
UBS believes volume growth for unit Jaguar Land Rover could "incrementally disappoint."
The standalone numbers were disappointing with the net profit sliding 1.4 per cent to Rs 565 crore from Rs 573 crore. The stock tanked as much as 8.73 per cent to an early low of Rs 251.80 on the BSE and was the biggest drag on the BSE 30-share sensitive index Sensex.
More from Business[caption id="attachment_325771" align="alignleft" width="380" caption="Tata Motors' March quarter earnings were in line with market expectations, but JLR margin was lower than estimates"]
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On the National Stock Exchange, the stock fell to an early low of Rs 137.50, down by over 11.08 per cent and was also the biggest loser on the broad-based Nifty.
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