Road ahead with Tata Motors?; stock down by 9 per cent intraday

Markets have corrected almost 10 per cent from their recent highs with Sensex trading at close to 26000 levels on Tuesday. The sentiment has turned sour in equity markets since two major events viz., Trump being elected as President and demonetisation of Rs 500 & Rs 1000 note, have unfolded.

Tata Motors shares have plunged from highs of Rs 542 per share as on November 8 to Rs 457.20 per share as on November 15, reflecting a correction in prices to the tune of almost 16 per cent.

On Tuesday on an intraday basis Tata Motors share cracked by almost 9 per cent touching intraday low of Rs 462.05.

Tata Motors fell along with the market, also because its September quarter numbers are disappointing.  Experts are projecting the numbers for JLR may not grow in coming quarters as well. For the recent quarter gone by JLR’s margin has fallen 190 basis points at 10.3 per cent on an annual basis. Few of the main reasons for the poor performance have been the hedging loss and forex revaluation of 318 pounds.

Institutional investor, Credit Suisse has reduced the target price to Rs 680 from Rs 720 due to poor performance.

Over one year the stock has generated 11 per cent and the stock will be under reckoning  for long term investors and portfolio managers, post hefty correction. Investors should wait till the downslide in the stock prices halts, before investing in the stock.