Shares of Tata Motors were trading higher for the fifth straight day, up 5% at Rs 176 on BSE, after a news report suggested that the company-owned Jaguar Land Rover (JLR) plans to cut thousands of jobs as part of a turnaround strategy.
In past one week, Tata Motors has outperformed the market by surging 12%, as compared to a 3.6% rise in the S&P BSE Sensex.
Jaguar Land Rover will announce plans early next year to cut thousands of jobs as part of a turnaround strategy, the Financial Times reported, citing several unidentified people close to the company.
“The UK luxury carmaker, owned by India’s Tata Motors, will outline the measures in January as part of a three-year cost-cutting program, the report said. In October, it outlined plans to deliver cost and cash flow improvements of 2.5 billion pounds ($3.15 billion) within 18 months,” it added. CLICK HERE TO READ FULL REPORT
Earlier this month, the S&P Global Ratings cut Tata Motors’s long-term rating to junk, the second downgrade for the Indian automaker in five months, citing headwinds for Jaguar Land Rover in some of its key markets.
In November, Moody's Investors Service changed the outlook on Tata Motors's corporate family rating to negative from stable.
"The negative outlook reflects our expectation that the weak operating performance of Tata Motors’ wholly-owned subsidiary, JLR, will likely to continue over next 12-18 months, in turn weighing on Tata Motors’ earnings and consequently also the rating trajectory," says Kaustubh Chaubal, a Moody's Vice President and Senior Credit Officer.
Tata Motors hit a multi-year low of Rs 155 on December 11, 2018, falling 65% from its 52-week high level of Rs 444 touched on January 9 this year.
At 02:06 pm, Tata Motors was trading 4.5% higher at Rs 174, the largest gainer among Nifty50 and S&P BSE Sensex. The counter has seen huge trading volumes with a combined 25.23 million equity shares changed hands on the BSE and NSE so far.