Tata Motors share price fell over 3% today amid reports that a new mutant strain of coronavirus is 'out of control' in the UK. British Prime Minister Boris Johnson has imposed a new, higher level of coronavirus restrictions on London and much of southeast England. This would adversely affect the sales of Jaguar Land Rover (JLR), UK-based subsidiary of Tata Motors.
Tata Motors share opened with a loss of 2.22% at Rs 176.50 against previous close of Rs 180.50 on BSE. The share further fell to Rs 174.5, down 3.32% intra day.
The share has gained 3.91% in one month. However, it is still down 5.13% since the beginning of this year and lost 0.23% in one year. Market cap of the firm fell to Rs 54,165 crore on BSE.
JLR's recovery from the pandemic is likely to be threatened by the new strain of Covid 19 in the UK. In second quarter of this year, retail sales were up 53.3% with 113,569 cars sold.
In the first quarter, the firm could sell just over 74,000 units. With normalising of the situation in UK and vaccination of first citizen in the country by Pfizer, the performance of JLR was seen improving to precovid levels.
The majority of JLR dealerships are now back in operation. The firm recorded a Rs 589 crore pre-tax profit in Q2, compared to a loss of Rs 3,741 crore in the previous quarter. However, the new strain of COVID-19 is expected to unwind the gains Tata Motors subsidiary had clocked in Q2.
By Aseem Thapliyal