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Capitalvia Global
Tata Motors (Sell)
CMP: ₹147.2
Target: ₹123
As the slowdown in the auto sector has progressively worsened, the automobile manufacturers are facing a serious setback. With all these factors discounted, Tata Motors reported pessimistic numbers. Based on our analysis, we see that it reported a consolidated net loss of ₹3,679.66 crore for the quarter April-June in comparison to net loss of ₹1,862.57 crore in the year-ago quarter. A decline of 8 per cent (y-o-y) was witnessed in revenue from operations.
The overall revenue came down to ₹60,830.16 crore in comparison to 65,956.78 crore in the same quarter last fiscal. The loss was majorly led by British arm Jaguar Land Rover. It posted a pre-tax loss of £395 million as compared to £264 million loss in the same period a year ago.
On a standalone basis, net loss for the quarter was at ₹97.1 crore as against a net profit of ₹1,187.65 crore in the year-ago period. 22.7 per cent decline in sales volume, production shutdowns, liquidity stress were major factors which have impacted revenue and margins.
We recommend ‘Sell’ on Tata Motors with a target price of ₹123.
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