Shares of Tata Motors Ltd. slipped below Rs 300 apiece for the first time since February 2016 on the expectation of muted earnings from subsidiary Jaguar Land Rover.
The automaker is the worst Nifty performer after Bharti Airtel Ltd. so far this year, having lost more than 30 percent. The stock trades around 36 percent below the Bloomberg consensus price target.
Tata Motors’ market capitalisation has fallen by half to just over Rs 95,000 crore from its last peak of Rs 1.88 lakh crore in September 2016.
Even though the company is doing well in the domestic market, the street has given more weight to weaker Jaguar Land Rover sales in the U.K. and the U.S., Ashwin Patil, auto analyst at LKP Securities, told BloombergQuint on the phone. Any fall in the luxury unit's sales is likely to keep Tata Motors' margins under pressure, Patil added. Tata Motors is scheduled to report its January-March quarter earnings on May 23.
Valuations are also at their lowest since March 2018, with price-to-earnings multiple at 7.3 times the estimated earnings for 2018-19, according to Bloomberg data. That compares with the five-year average of 8.8 times.