Tata Motors slips 3%, nears 52-week low ahead of June quarter results

Shares of Tata Motors dropped 3 per cent to Rs 146 in the morning deals on Thursday, extending its previous day’s 3 per cent decline on the BSE, ahead of April-June quarter (Q1FY20) earnings due later in the day. The stock of commercial vehicles major was trading close to its 52-week low of Rs 142 hit on February 8, 2019 in intra-day trade.

Analysts expect the decrease in volume across all segments to impact both the company's revenue and bottom-line. They see a 28-30 per cent year-on-year (y-o-y) fall in net profit and 13-16 per cent dip in revenue for the period under review. CLICK HERE TO READ FULL REPORT.

Fitch Ratings has downgraded the Long Term Issuer Default Rating of Tata Motors to “BB-" from “BB". The ratings agency has also removed the automaker’s previous Rating Watch Negative (RWN) status, where it was placed on February 6, 2019.

“The downgrade reflects the reduction in Fitch's expectations for Tata Motors' profitability and free cash generation in the next two to three years. Fitch revised its estimates because business risks have increased in both its India operations and its fully-owned UK-based subsidiary, Jaguar Land Rover (JLR) Automotive plc (JLR, BB-/Negative), while Tata Motors is likely to invest to bolster its long-term competitiveness. This will result in sustained deterioration in Tata Motors’ financial profile, including its leverage,” rating agency said in a release.

Meanwhile, Tata Motors in 2019 annual report said, from 2020, JLR will be introducing its next-generation modular architecture, which will streamline engineering and manufacturing processes and reduce complexity with the aim to reduce costs and improve quality. JLR have invested intensively to prepare for the move from the internal combustion engine to autonomous, connected, electrified and shared mobility or "ICE" to "ACES".

The stock has underperformed the market in the last three months, by falling 38 per cent from its recent high of Rs 236 on April 18, 2019. In comparison, the S&P BSE Sensex has slipped 3 per cent during the same period.

At 10:32 am, Tata Motors was trading 2 per cent lower at Rs 149, against a 0.39 per cent rise in the benchmark index. A combined 13 million shares changed hands on the counter on the BSE and NSE so far.