Tata Motors stock hits fresh 52-week low after net profit falls 50% in Q4

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Tata Motors stock hits fresh 52-week low after net profit falls 50% in Q4

The Tata Motors stock fell in Thursday's trade after the firm reported a nearly 50% fall in Q4 net profit. At 12:08 pm, the stock was trading 6.69% lower to 288.55 on BSE. The stock is the top Sensex loser in trade today. The stock hit a fresh 52-week low of Rs 284.70 falling nearly 8% in trade today.

The stock is down 32.77% since the beginning of this year. It has lost 38.25% during the last one year.

The stock has been highly volatile with an intra day volatility of 5.78%. It has fallen after two days of consecutive gains.

During the last one week, the stock has fallen 8.09% .

Brokerage Motilal Oswal has given a buy call on the stock with a revised target price of Rs 471.

"We are lowering our FY19/20 consol EPS by 20-24%, to factor in for a) impact of higher expensing of R&D, b) commodity cost inflation and c) adverse mix. The stock trades at 5.8 times FY20 EPS and 2.1 times EV/EBITDA. Buy with revised target price of Rs 471 (SOTP)," Motilal Oswal said in a note. Prabhudas Lilladher too has given a buy call on the stock with a price target of Rs 378.

Meanwhile, global brokerage firms CLSA, Jefferies and Morgan Stanley have cut their price target on the stock.

CLSA has maintained sell rating on Tata Motors but cut its target price to Rs 295 per share from Rs 330 earlier. "Outlook for JLR remains weak and the margin commentary was subdued," it said in a research note.

The brokerage has cut its FY19 and FY20 EPS estimates by 7 percent and 8 percent, respectively, considering lower volumes, margin as well as higher depreciation for JLR.

Jefferies while maintaining its buy rating has cut its 12-month target price to Rs 440 per share from Rs 510 earlier. "The near-term demand outlook for JLR remains challenging. Strong macro and likely improvement in the market share trends aids the standalone business. Valuation, post the steep correction, makes the risk-reward favourable in our view," it said in a research note.

Morgan Stanley kept its equal-weight rating unchanged on the stock, but cut its 12-month target price to Rs 339 per share from Rs 407 earlier. The global investment bank also reduced its 12-month target for Tata Motors DVR to Rs 220 per share from Rs 228 earlier. "The stock looks cheap but it lacks an upside trigger. We have lowered our FY19e/20e earnings by 31/21%, respectively," it stated.

On Wednesday, homegrown auto major Tata Motors reported a 49.82 per cent fall in its consolidated net profit at Rs 2,176.16 crore for the March quarter with its British arm JLR continuing to face challenges in the UK and Europe, in addition to one time impairment charge.

The firm had posted consolidated net profit of Rs 4,336.43 crore in the corresponding period of last fiscal, Tata Motors said. ts consolidated income from operations in the fourth quarter of 2017-18 was Rs 91,279.09 crore. It was at Rs 78,746.61 crore in the year-ago quarter.

The company said an exceptional debit of Rs 1,641.38 crore was provided after it reviewed product development programmes in capital-work in progress and consequently provided for impairment during the quarter. The two figures are not comparable due to GST implementation from July 1 last year, after which revenue from operations is reported net of GST.

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