Nomura slashed the target price by the biggest amount, by 22% to Rs 146.
By ET Bureau | Updated:
MUMBAI: Most brokerages slashed target price on auto major Tata Motors after the company’s losses doubled in the June quarter. The stock fell 4% to a fresh nine-year low in Friday’s session but recouped losses to end 2% higher at Rs 147.20.
The company reported a loss of Rs 3,679.66 crore for the threemonths ended June against a loss of Rs 1,862.57 crore last year. Its British luxury arm, Jaguar Land Rover, posted a pre-tax loss of £395 million.
Nomura slashed the target priced by the biggest, 22% to Rs 146, while retaining a ‘neutral’ stance. Kotak Institutional Equities and ICICI Securities maintained a ‘buy’ ratings but slashed target price by 4.65% and 6.45%, respectively. Elara Securities has trimmed target price by18.6% toRs 166 and CLSA cut its target price by 14.3% to Rs 120.
CLSA has cut FY20-21 EPS estimates by 9-31% to factor in lower JLR margins.
"JLR’s volume has come under pressure due to a broad-based slowdown in luxury auto demand and a weak product cycle... Margin pressures, however, continue to be more intense than expected and we see risks to JLR’s 3-4% Ebit margin guidance for FY20-21,” said CLSA, retaining a ‘sell’ rating.
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However, CIMB Securities has maintained ‘add’ rating citing attractive valuation of 0.7 times one-year forward EV/sales.
Morgan Stanley has maintained ‘equal-weight’ rating with a target price of Rs 192.
“1Q results missed our estimates as JLR margin dipped and negative cash flow drove net debt higher... While valuation is cheap, we still await signs of a volume turnaround," said Morgan Stanley.
