Tata Motors Falls As Core Earnings Fail To Impress

Shares of Tata Motors fell as much as 5.5% on Thursday, a day after the automaker reported second-quarter core earnings that at least three analysts said missed their estimates due to higher expenses.

Tata Motors posted a narrowed net loss for the July-September quarter and said its earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 53% year-over-year.

However, brokerage Jefferies said the company's EBITDA came in 14% below its estimate, while Emkay Research and Motilal Oswal also said the number missed their estimates.

"Tata Motors' performance was an all-around miss," Motilal Oswal analyst Jinesh Gandhi wrote in a note. "Jaguar Land Rover (JLR) continues to struggle with semiconductor shortages, which has been impacting its performance for the last five-to-six quarters." Tata Motors stock was last down 4.4% at 414.25 rupees and was the biggest loser on India's benchmark Nifty 50 index, which is down 0.7%. [.BO]

Analysts also trimmed their earnings estimates on the company saying it would face cost pressures. Motilal Oswal was among the most aggressive, now expecting Tata to post a loss this fiscal, compared with its earlier forecast of a profit.

Tata Motors still expects cash flow to bounce back in the second half, thanks to healthy demand for its Jaguar Land Rover cars and a drop in domestic steel costs.

The current average rating of 30 analysts covering the stock is "buy" and the median price target is 512 rupees, according to data from Refinitiv.

Through the last close, Tata Motors shares had shed a tenth of their value, while the Nifty 50 index had gained around 4%. ($1 = 81.5830 Indian rupees)

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Janane Venkatraman)