3:17 PM: Tata Motors skids 4% after JLR reports double digit fall in June sales

Tata Motors shares fell 4 percent intraday on July 10 after Jaguar Land Rover reported double-digit fall in June sales.

The UK-based luxury car maker and the subsidiary of Tata Motors said its retail sales declined 9.6 percent to 47,060 units in June compared to the same month last year.

The fall was due to weak performance across key geographies. Europe JLR retail sales fell 11.7 percent, China 12.3 percent and overseas down 18.6 percent.

Meanwhile, global brokerage house CLSA has a sell rating on Tata Motors with a target price at Rs 150, citing rising warranty and impairment concerns.

Warranty expense and provisions rose to a 9-year high in FY19 and free cash flow was negative for the second year in a row, CLSA said, adding JLR turned net debt in FY19.

Hence, CLSA is negative on the stock given multiple headwinds at JLR that contributed 75 percent of the company’s total revenue in FY19.

The stock was quoting at Rs 150.30, down Rs 5.45, or 3.50 percent on the BSE at 1457 hours IST.

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