Stock advisory Company >> Tata Motors in a rut as JLR’s operating margins plunge

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As if ringing the alarm bells for weak results, Tata Motors Ltd (TML) shares fell by 3.2% on Wednesday even as the firm announced its June quarter results after markets closed. The media release says it all. Tata Motors managing director and CEO, Guenter Butschek said, “While the first quarter results have not met our expectations, we are working with renewed focus and energy to improve the performance of our commercial and passenger vehicle businesses.”

A tough environment both international markets along with foreign exchange hedges that turned unfavorable led to weak revenue ramp-up and plunging profits that came way below forecasts.

Consolidated revenue fell by 10% to Rs58,651 crore on poor sales ramp-up in its UK subsidiary and cash cow, Jaguar Land Rover Plc, coupled with weaker performance in the domestic commercial vehicle market.

Indeed, Tata Motors’s weakness in medium and heavy commercial vehicles where it is steadily losing share to the No.2 player, Ashok Leyland Ltd, is not surprising, given its poor focus on product portfolio.