CLSA is negative on the stock given multiple headwinds at JLR that contributed 75 percent of company's total revenue in FY19
Tata Motors shares dipped over a percent intraday on July 9 after global brokerage house CLSA remained bearish on the stock due to multiple headwinds at luxury car maker Jaguar Land Rover.
"We have a sell rating on Tata Motors with a target price at Rs 150, implying 3 percent downside from current levels," the research firm said, adding rising warranty and impairment are concerns.
Warranty expense as well as provisions rose to a 9-year high in FY19 and free cash flow was negative for the second year in a row, CLSA said, adding JLR turned net debt in FY19.
Hence, CLSA is negative on the stock given multiple headwinds at JLR that contributed 75 percent of the company's total revenue in FY19.
"Closing net automotive debt was Rs 28,394 crore reflecting the cumulative negative free cash flow primarily at JLR," Tata Motors said while releasing FY19 earnings.
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