Tata Motor shares drop on Jaguar Land Rover warning
Thursday, 24 January 2013
MUMBAI: Shares in Tata Motors slumped nearly 10 percent Thursday after its luxury car arm Jaguar Land Rover warned investors that its profit margin for the latest quarter would be "slightly lower" than previously.
The firm said the drop from the previous two quarters reflected factors including "less favourable exchange rates" and a higher proportion of sales of the less profitable Evoque, its compact sports-utility vehicle.
Shares in Tata Motors, India's top vehicle maker, dropped as much 9.6 percent on the Bombay Stock Exchange early Thursday and were trading down 7.90 percent at 287.35 rupees late morning.
Tata Motors, part of the giant salt-to-steel Tata conglomerate, relies on Jaguar Land Rover for the bulk of its profits.
Despite the warning of a reduced profit margin, revenues in the last three months of 2012 will be higher than the previous two quarters, reflecting increased sales volumes, the company said.
Jaguar Land Rover and Tata Motors are due to announce their earnings for the October to December quarter in February.
Tata bought the iconic British brands from Ford Motor in 2008 for $2.3 billion as part of plans to expand its reach beyond Asia, in a deal that vaulted Tata Motors from a commercial vehicle and small-car maker into a global player. (AFP)