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Last Updated : Feb 12, 2019 10:57 AM IST | Source: Moneycontrol.com

Tata Motors stock crash: Over 200 mutual fund schemes own equity worth Rs 4,000 cr

In terms of value, more than Rs 4,000 crore of mutual fund money is riding on Tata Motors, and approximately Rs 1,700 crore in Tata Motors DVR

Kshitij Anand @kshanand
 
 
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Shares of Tata Motors, which underperformed benchmark indices in 2018, witnessed a fresh round of selling recently after December quarter results. It led to an erosion of more than Rs 8,600 crore in terms of market capitalisation.

Tata Motors hit a 10-year low in intraday trade a day after it reported a net loss of Rs 26,961 crore for the quarter ended December 2018 impacted by an exceptional item of asset impairment of Rs 27,838 crore.

Over 200 mutual fund schemes are invested in Tata Motors, which is part of Nifty and Sensex. Any drastic slide in market price could also impact those which have considerable exposure in the automaker.

Out of 200 schemes, 16 have exposure of more than 2 percent including Reliance Capital Builder, Reliance Vision, Reliance Tax Saver, UTI Focused Equity, Kotak India Growth Fund and ICICI Prudential Bharat Consumption, Morningstar India data showed.

In terms of value, more than Rs 4,000 crore of mutual fund money is riding on Tata Motors, and approximately Rs 1,700 crore in Tata Motors DVR, data showed.

We have collated a list of 15 MFs from data provided by Morningstar India that have exposure of more than 2 percent of their AUM in Tata Motors:

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According to Reuters, analysts giving buy rating to Tata Motors have reduced from 16 to 11 in the last three months. The consensus has now shifted towards holding the stock.

Some brokerage firms such as Axis Capital and Motilal Oswal downgraded Tata Motors stock post the December quarter numbers that were impacted by an exceptional item of asset impairment.

Most brokerage firms reduced their earnings per share (EPS) estimate for Tata Motors and reduced their target price on the stock. CLSA retained sell rating on Tata Motors and has a target price of Rs 150.

JLR reported a loss for the third straight quarter as net sales declined 1 percent YoY to 6.2 billion pounds, as volumes fell 11 percent YoY. EBITDA margin shrank 180 bps to 7.3 percent impacted by one-off cost on account of de-stocking and warranty cost.

JLR margins declined QoQ despite higher volume. The big asset impairment dragged Tata into a consolidated loss. The demand outlook has worsened in recent quarters in China and India.

CLSA slashed its FY19-21 EPS estimate for Tata Motors by 2-66 percent. The stock will remain weak given insufficient near-term product triggers, said the research firm.

The weak sales in China and de-stocking have impacted JLR numbers. The December quarter loss stood at 3,129 million pounds. JLR’s EBITDA margin stood at 7.8 percent which was 200 bps below estimate.

The finance cost for the Indian automaker increased by Rs 321 crore to Rs 1,568 crore during Q3FY19 versus the same quarter last year.

It is tough to bottom fish in the company while P&L (profit & loss) seems to be near trough.

Axis Capital downgraded Tata Motors to 'hold' after December quarter earnings and reduced its target price to Rs 187 from Rs 217 earlier.

Motilal Oswal downgraded Tata Motors to 'Neutral' after December quarter results with a target price of Rs 166. The brokerage firm also slashed its FY20/21 consolidated EPS estimate by 21percent/13 percent.

Deutsche Bank maintained its 'hold' rating on Tata Motors after December quarter results and reduced its target price to Rs 175 from Rs 195 earlier.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Feb 12, 2019 10:57 am
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