Tata Motors today:In early trading on Wednesday, Tata Motors shares fell 4.2 per cent after global brokerage firm UBS issued a ‘sell’ rating with a 20 per cent downside at a target price of Rs 825 per share.
In the brokerage note, UBS questioned whether investors should be concerned about deep discounts on the company’s UK subsidiary, Jaguar Land Rover.
At 09:41, Tata Motors shares were trading 4.13 per cent or 42.80 points lower at Rs 993.00 apiece. The stock is already down 12 per cent from its all-time high of Rs 1,179, which it had recorded on July 30, 2024.
In its note, UBS raises the question of whether investors should be concerned about rising discounts at Jaguar Land Rover (JLR), the British subsidiary of Tata Motors.
Jaguar Land Rover (JLR)’s premium models, including the Defender, Range Rover and Range Rover Sport, have contributed to a rise in average selling prices (ASPs). However, demand for these models is starting to slow, with the order book now below pre-pandemic levels. As a result, discounts on Range Rovers may rise. Moreover, analysts warn of potential downside risks, including margin slippage in the Indian passenger vehicle segment of JLR and Tata.
In the June quarter, JLR reported a 5.4% increase in revenue to £7.3 billion. The company’s operating margin, measured as earnings before interest and tax (EBIT), improved by 30 basis points to 8.9%, driven by favourable improvements in volume, product mix and material costs.
By 2024, Tata Motors is the only stock in the Nifty 50 that has doubled its value in calendar year 2023. The stock has risen more than 30 per cent so far this year.
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