Tata Motors Ltd.’s quarterly loss was lesser than analysts’ estimates as its luxury car unit showed signs of improvement. The automaker also approved a plan to raise capital to the tune of Rs 10,000 crore to pare debt.
Sales of Jaguar Land Rover—which contributes the most to Tata Motors’ profit—improved this quarter and delivered a well-rounded performance, the company said in a statement accompanying the earnings. Also, Project Charge- the firm’s cost-cutting program for JLR, has delivered £2.2 billion so far, the filing said.
Definitely, it’s a big surprise. In fact, JLR’s operating margin metrics is above our expectations. This comes in an environment where the overall luxury market globally is undergoing a challenging period.Mitul Shah, analyst at Reliance Securities.
The expectation of pre-buying before migration to Bharat Stage-VI emission norms may not materialise as anticipated, brokerage Maybank Kim Eng said in a research note prior to the earnings. Also, the price increase due to migration may force customers to delay purchases of trucks until full economic recovery, it said.
Shares of Tata Motors fell 5 percent ahead of the earnings announcement compared with NSE Nifty Index, which remained largely unchanged.
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