NEW DELHI: Shares of Tata Motors on Tuesday plunged nearly 20 per cent to hit a seven-year low after its premium brand Jaguar Land Rover (JLR) reported a 12.3 per cent decline in global sales. The stocks fell below Rs 200 level at Rs 170.65, the lowest since December 19, 2011, falling 19.78 per cent intraday. By end of the day, it showed slight recovery and closed at Rs 184.25 on the BSE, down by 13.40 per cent. On NSE, the scrip dropped 13 per cent to close at Rs 184.55.
The record downfall eroded the company’s market valuation by Rs 8,228.6 crore to stand at Rs 53,199.40 crore on the BSE. The stock was also the worst-hit among the blue chips on both the key indices during the day.
JLR on Monday reported total retail sales of 57,114 vehicles in September 2018, down 12.3 percent year-on-year (YoY), hit by 46.2 per cent YoY fall in China sales. Its sales were down a modest 0.8 per cent in the UK and 4.7 per cent in Europe. In North America the sales were 6.9 per cent lower.
“Customer demand in China has struggled to recover following changes in import tariffs in July and intensifying competition on price, while ongoing global negotiations on potential trade agreements have dampened purchase considerations,” said Felix Brautigam, chief commercial officer, JLR.
Expecting a weak demand in near future, the company announced a shutdown of its West Midland plant for two weeks, which further dampened investor sentiments. Recently, Fitch Ratings revised its outlook on JLR to negative from stable as it faces dual challenge of Brexit and currency headwinds.
JLR, which was once Tata’s crown jewel, has started affecting the auto major’s stronghold in Dalal Street. In the last one year alone, Tata Motors’ stock has plunged over 60 per cent (It touched a high of Rs 466.95 on November 6, 2017). The fall in its stock value also comes at a time when the company has seen significant improvement in its passenger vehicle sales and a robust growth in commercial vehicle segment.
This article provided by NewsEdge.