JLR performance was lower than expectation at all three fronts – revenue, EBITDA and PAT. Weak volumes (down 6% yoy, up 11% qoq) led to 1% yoy drop in top-line to GBP6,223mn. Given the muted demand scenario, JLR adjusted downwards, the carrying value of capitalized investments, resulting in a non-cash pre-tax exceptional charge of GBP3.1bn and an overall pre-tax loss of GBP3.4bn for Q3FY19.
JLR’s recent announcement of reducing its global workforce by 4,500 people is expected to result in a one-time exceptional redundancy cost of ~GBP200mn.
Meanwhile, most of the brokerage firms have reduced the company's earnings per share (EPS) estimate and also reduced their target price on the stock. CLSA, which retained Sell rating on Tata Motors, has a target price of Rs150, which translates into a downside of 17% from Thursday’s close.
Tata Motors Ltd is currently trading at Rs155.20 down by Rs27.7 or 15.14% from its previous closing of Rs182.90 on the BSE. The scrip opened at Rs164.65 and has touched a high and low of Rs164.65 and Rs141.90 respectively.