Tata Motors shares surge as it reports lower losses
Major savings drive at Jaguar Land Rover has moved the division back into profit
Jaguar Land Rover’s Indian owner;s shares jumped the most in a decade during the special Diwali trading session on Sunday, after reporting a narrower loss than expected in the second quarter.
Tata Motors surged 16.8 per cent to 148.10 rupees (Dh7.68) at 7.08pm in Mumbai. The company reported on Friday, after the market had closed, that it had lost 2.17 billion rupees in the three months ending on September 30, versus a loss of 10.5bn rupees a year earlier, the company said. Analysts on average expected a loss of 16.35bn rupees, according to data compiled by Bloomberg.
After struggling in China, and dealing with fallout from the ongoing uncertainty around Brexit, JLR has almost completed a £2.5bn (Dh11.78bn) savings drive that includes cutting thousands of jobs worldwide, the car maker said on Friday. Tata Motors bought the maker of the Jaguar XE sedan and Land Rover Discovery sport utility vehicle from Ford Motors in 2008. JLR’s pretax profit for the quarter was £156 million.
“It’s an organisation that’s got leaner in terms of costs,” Pankaj Murarka, chief investment officer at Renaissance Investment Managers told BloombergQuint. “JLR’s performance should improve every quarter for the next few quarters.”
Stock exchanges in India hold a special one-hour session every year to celebrate the Hindu festival of Diwali. Tata Motors jumped the most since May, 2009, during the session.
Demand for Jaguar Land Rover vehicles in China in now stabilising, PB Balaji, group chief financial officer, said on a conference call with reporters. The brand has suffered from quality issues and troubles with its dealership network in the world’s biggest car market, while parent Tata has been hit by the worst-ever slump in India’s auto market.
Analysts at Sanford C. Bernstein last month described JLR as “severely challenged” and said Tata Motors should look at BMW as a potential buyer for the unit because the German company is “awash with cash”.
Tata Group, the Indian conglomerate that owns Tata Motors, is open to finding partners for the car maker but isn’t planning on selling the embattled division, chairman Natarajan Chandrasekaran said in an interview earlier this month.
Updated: October 27, 2019 07:05 PM