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Last Updated : Sep 12, 2019 01:51 PM IST | Source: Moneycontrol.com

Tata Motors falls 4% after global sales slump but Kotak retains buy — here's why

Kotak Institutional Equities expects JLR volumes to pick up from FY21. It is of the view that standalone business remains under pressure due to a general slowdown.

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Tata Motors slumped over 4 percent to 128.50 intraday on September 12 after the auto major reported a 32 percent decline in global sales, including that of Jaguar Land Rover (JLR), to 72,464 units in August. It had sold 1,07,030 vehicles in the year-ago period.

Globally, Tata Motors commercial vehicles and Tata Daewoo range sold 25,366 units, down 45 per cent from 45,719 vehicles a year ago, the company said in a statement.

Its world-wide passenger vehicle sales were at 47,098 units, down 22 per cent from 61,328 vehicles in August 2018.

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JLR sales dropped to 39,615 units from 42,658 vehicles. Jaguar sold 10,097 vehicles and Land Rover 29,518 units in August.

Research and broking firm Kotak Institutional Equities expects JLR volumes to pick up from FY21. It is of the view that standalone business remains under pressure due to a general slowdown.

The UK sales were solid but down 21.6 percent compared to August 2018, which was boosted by WLTP certification timing factors.

Other markets were also down, including Europe (1.4 percent) and North America (9 percent, impacted by new engine introduction timing issues in September), and overseas (24.7 percent, primarily softer sales in Korea and MENA).

However, it has maintained a buy call, with a target at Rs 190 per share.

The stock has gained 17 percent in the last five days.

The auto sector hopes of a GST cut, especially after finance minister Nirmala Sitharaman hinted at more steps to help the automobile companies, has provided some support, helping the auto index close 3.6 percent higher on September 11.

At 1325 hours, Tata Motors was quoting at Rs 128.50, down Rs 5.85, or 4.35 percent. It has touched an intraday high of Rs 135.30 and an intraday low of Rs 128.30.

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First Published on Sep 12, 2019 01:51 pm
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