Tata Motors PV shares fall after profit plunges, warns on margins

According to Business Recorder, shares of Tata Motors Passenger Vehicles slid on Friday, at one point by up to 6%, after the company reported that quarterly profit had collapsed by 80%. It also cautioned that margin pressure would carry into the July-September quarter. By 1:37 PM IST the stock had shed 4.8% to 332.85 rupees, its steepest one-day drop since June 17, and it led losers on both the auto and Nifty 50 indices.

Management linked the outlook to commodity-related costs, and CEO Shailesh Chandra warned that the second quarter would be tough for the whole sector, not only for his company. Jefferies pointed to heavy discounts, higher warranty costs and stiffer competition at Jaguar Land Rover, which generates about 80% of revenue, and cut its FY27 earnings per share estimate by 10% while keeping an underperform rating. Nomura, which kept a neutral rating, said margin strain at JLR and in the home market could weigh on cash generation in the short term.

Tata Motors PV reported a consolidated net profit of 7.75 billion rupees for the April-June quarter, compared with 39.24 billion rupees in the same period a year earlier. The figures were released on Thursday, a day before the share price decline.