Tata Motors has tanked over 9% to Rs 282 on the NSE in opening deals after the company said that the earnings before interest taxes, depriciation and amortisarion (EBITDA), also known as the operating margin, for the December quarter (Q3) is likely to be slightly lower than in the previous two quarters.
The company said that sales for JLR, which accounts for a majority of Tata Motors' profits, have slowed significantly over the past quarter.
“EBITDA profit is likely to be in the region of levels reported for the previous two quarters and EBITDA margin is likely to be slightly lower than in the previous two quarters, primarily reflecting less favorable exchange rates, the ongoing effect of a higher mix of Evoque sales and other factors,” Tata Motors said in a statement.
“Free cash flow (cash from operations after capital spending) will be negative in the quarter ended 31 December (reflecting working capital calendarisation effects); free cash flow will be positive in the first nine months of the Fiscal year to date,” it added.
Meanwhile, UBS cut Tata Motors fiscal 2013 and 2014 earnings-per-share (EPS) estimates by 6% after the automaker warned its luxury unit Jaguar Land Rover is likely to report a lower EBITDA margin in the October-December quarter, the Reuters report suggests.
The stock opened at Rs 287 and has seen a combined 5.34 million shares changing hands on the counter in opening deals.