Tata Motors gains 10% on buzz of stake divestment in JLR

Shares of Tata Motors gained 10 percent intraday Tuesday on the buzz of stake sale by the company in JLR. Meanwhile, the company reported weak set of sales numbers for the month February 2019.

Company has clarified on the news about JLR stake sales that there is no truth to the rumours that Tata Motors is looking to divest its stake in JLR and we would not like to comment further on any market speculation.

The company's commercial and passenger vehicles business sales in the domestic market declined 3 percent at 57,221 units as against 58,993 units in a year ago period.

However, the cumulative sales for the domestic market (April 2018-February 2019) grew by 18 percent with 610,108 units as compared to 517,198 units.

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Its CV domestic sales declined by 5% in February 2019 at 39,111 units versus 41,222 units, while M&HCV truck segment declined by 18%, at 12,437 units.

The PV domestic sales witnessed, a growth of 2%, at 18,110 units while company's exports was at 2,930 units, lower by 39% over last year.

Macquarie has maintained outperform call on Tata Motors with a target at Rs 260 per share.

According to Macquarie, the JLR's dollar ASP may have declined 5.4 percent YoY in February. The average incentives increased due to an increase in incentives on Jaguar models.

It expect JLR's cost reduction plans to yield positive results in 2019.

Nomura has maintained neutral call on the stock with a target at Rs 187 per share.

The stock is factoring a 12% decline in global wholesales for JLR in February and 10% decline in overall JLR volumes in FY19.

The company ramp-up for I-Pace and launch of new Evoque can help volumes in FY20.

It do not expect a re-rating given tough market conditions in China and there are risks to demand from a no-deal Brexit.

At 11:15 hrs Tata Motors was quoting at Rs 195.85, up Rs 15.75, or 8.75 percent on the BSE.

For more market news, click here First Published on Mar 5, 2019 11:15 am