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NEW DELHI: Auto major ' shares plunged over 5 per cent on Wednesday after the company reported a consolidated net loss of over $1 billion for the quarter ended March and gave a rather pale outlook for the June quarter.
The consolidated net loss was a surprise for the Street, which had expected the company to report a handsome net profit for the reported quarter. Moreover, the company's dour outlook due to supply-side issues related to semi-conductor shortage also weighed heavy on sentiment of investors.
The company's British arm, Jaguar Land Rover reported a pre-tax loss of 952 million pounds for the quarter owing to the 1.5 billion pounds of exceptional charges, including 952 million pounds of non-cash write-downs of prior investments and 534 million pounds of restructuring charges expected to be paid in FY22.
The exceptional losses at JLR were a result of the company's 'Reimagine' strategy that entails a complete shift towards production of electric luxury cars in the future. "We believe JLR launches in the BEV space are pretty late than competition and coupled with lower investments, could lead to market share loss going forward," said brokerage firm Kotak Institutional Equities, which has a 'sell' rating on the stock.
"JLR is trading at significantly higher multiple as compared to BMW, which is not justified in our view," Kotak Equities said.
However, JLR clocked a 20.5 per cent increase in revenue to 6.5 billion pounds for the quarter, led by China and the new Defender model. Retail sales in the fourth quarter were 1,23,483 units, up 12.4 per cent on a year-on-year basis.
For FY21, JLR revenue was at 19.7 billion pounds while retail sales were at 439,588 units, down 13.6 per cent.
Shares of Tata Motors have delivered a return of more than 310 per cent in the last one year from its 52-week low of Rs 80.80 on May 20, 2020 on the hype around electric vehicles that was magnified by the entry of Tesla Motors in India earlier this year. The counter is still only 12 per cent off from its recent peak of Rs 357 hit in March.
In the domestic market, Tata Motors said the business scenario is fluid with the second wave of the pandemic hitting India resulting in multiple lockdowns. A sequential improvement in overall performance is expected from the second quarter of FY22, it said.
The consolidated net loss was a surprise for the Street, which had expected the company to report a handsome net profit for the reported quarter. Moreover, the company's dour outlook due to supply-side issues related to semi-conductor shortage also weighed heavy on sentiment of investors.
The company's British arm, Jaguar Land Rover reported a pre-tax loss of 952 million pounds for the quarter owing to the 1.5 billion pounds of exceptional charges, including 952 million pounds of non-cash write-downs of prior investments and 534 million pounds of restructuring charges expected to be paid in FY22.
The exceptional losses at JLR were a result of the company's 'Reimagine' strategy that entails a complete shift towards production of electric luxury cars in the future. "We believe JLR launches in the BEV space are pretty late than competition and coupled with lower investments, could lead to market share loss going forward," said brokerage firm Kotak Institutional Equities, which has a 'sell' rating on the stock.
"JLR is trading at significantly higher multiple as compared to BMW, which is not justified in our view," Kotak Equities said.
However, JLR clocked a 20.5 per cent increase in revenue to 6.5 billion pounds for the quarter, led by China and the new Defender model. Retail sales in the fourth quarter were 1,23,483 units, up 12.4 per cent on a year-on-year basis.
For FY21, JLR revenue was at 19.7 billion pounds while retail sales were at 439,588 units, down 13.6 per cent.
Shares of Tata Motors have delivered a return of more than 310 per cent in the last one year from its 52-week low of Rs 80.80 on May 20, 2020 on the hype around electric vehicles that was magnified by the entry of Tesla Motors in India earlier this year. The counter is still only 12 per cent off from its recent peak of Rs 357 hit in March.
In the domestic market, Tata Motors said the business scenario is fluid with the second wave of the pandemic hitting India resulting in multiple lockdowns. A sequential improvement in overall performance is expected from the second quarter of FY22, it said.
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