Now Reading: Tata Motors shares slide 5% on JLR woes and cost pressures
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Tata Motors shares slide 5% on JLR woes and cost pressures
Tata Motors' stock fell 5% in Tuesday's trade after the company reported a weak June quarter, hurt by falling Jaguar Land Rover (JLR) volumes and rising input costs. JLR's wholesale volumes dropped…
The Story in Brief
Tata Motors' stock fell 5% in Tuesday's trade after the company reported a weak June quarter, hurt by falling Jaguar Land Rover (JLR) volumes and rising input costs. JLR's wholesale volumes dropped 10% year-on-year due to ongoing semiconductor supply disruptions. The auto major also flagged that commodity inflation and a price war in the domestic passenger vehicle segment squeezed margins. The company's consolidated net profit missed analyst estimates by a wide margin. Tata Motors PV's domestic market share has also come under pressure from competitors' new launches.
The Indian Opinion
The standard narrative that Tata Motors is a simple success story of JLR revival ignores the fact that the British unit remains acutely vulnerable to semiconductor snags and chip shortages. Investors who piled in on the luxury brand's recovery now face a reality check as commodity cost inflation and intense domestic competition from Hyundai and Mahindra squeeze margins. The real test will come in the December quarter when JLR's supply constraints should ease. If margins do not improve by then, the stock’s premium valuation will be hard to justify.
Source: auto.economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
