In the opening hours of Monday, shares of Tata Motors Ltd fell about 5% to Rs. 393 per share on the BSE following the automaker’s disclosure of lower-than-anticipated wholesale volumes for its Jaguar Land Rover (JLR) business and a downgrade of the auto stock by international brokerage JP Morgan.
For the second quarter, Tata Motors’ wholesale volumes for Jaguar Land Rover (JLR) (excluding its joint venture in China) were 75,307, compared to its August forecast of approximately 90,000. The manufacturer, which is among the biggest in the nation, attributed its failure to fulfil its goal to a lower-than-anticipated supply of specialised chips from one supplier. However, it asserted that increased revenues in the second half of the fiscal year will result from new agreements with semiconductor vendors.
JPMorgan said in a note that it was reducing the shares of Tata Motors to “neutral” from “overweight” and lowering its target price to Rs 455 (from Rs 525). “We would need more clarity on the pace of production recovery at Jaguar Land Rover to turn constructive on the stock,” JPMorgan added.
In September, Tata Motors’ overall domestic sales rose by 44% to 80,633 units. In September 2021, the company had delivered 55,988 units to dealers. The Mumbai-based automaker claimed that its overall domestic passenger vehicle dispatches increased by 85% in September 2021 to 25,730 units, reaching 47,654 units last month.
According to Tata Motors Passenger Vehicles Managing Director Shailesh Chandra, the company’s sales last month of 47,654 were the greatest monthly total ever, driven by record sales of the Nexon and Punch. “With the recent launch of the Tiago EV, the company has opened new vistas and is poised to drive the mass adoption of EVs across the country. Going forward, we expect the festive season will witness strong retail on the back of improving the supply of vehicles,” he added.
Government subsidies and high import tariffs have helped Tata take the lead in India’s EV market, and the business plans to increase its electric PV portfolio from 3 EVs at the moment to 10 EVs by FY26. Existing EV owners opting for a more compact vehicle with upscale features are the target market for Tiago EV.
