Shares of Tata Motors extended their losses and slipped over 3 percent in early trade on Wednesday.
The stock dipped as much as 3.36 percent each to Rs 306.30 apiece on the BSE and Rs 306.25 on the National Stock Exchange (NSE) during the early morning trade on Wednesday.
At 11:42 am, Tata Motors stock was at Rs 312.00, down Rs 4.95 (1.56 percent) on the BSE and at Rs 312.20, down Rs 4.70 (1.48 percent) on NSE. Over 41.74 lakh shares were traded on the BSE so far in the intraday trade while over 5.95 crore shares exchanged hands on NSE.
On Tuesday, Tata Motors scrip had gone into a tailspin erasing early gains and crashed over 8 percent lower on both the exchanges triggered by a selloff towards the end of the trade session.
The automaker’s UK subsidiary Jaguar Land Rover (JLR) on Tuesday reported a 68.1 percent year-on-year rise in retail sales for the quarter ended June 2021 at 124,537 units. It had retailed 74,067 units in the April-June quarter last year.
Wholesales were up 72.6 percent on-year at 84,442 units (excluding China JV). However, wholesales were around 30,000 units lower than demand would have permitted due to semiconductor supply constraints and impacts of Covid-19 affecting the global auto industry, JLR said in its statement.
“Looking ahead, the chip shortage is presently very dynamic and difficult to forecast,” the statement said adding that based on the recent inputs from suppliers, JLR now expects chip supply shortages in the second quarter ended September 2021, to be greater than in the first quarter, potentially resulting in wholesale volumes about 50 percent lower than planned.
“We expect the situation will start to improve in the second half of our financial year. However, the broader underlying structural capacity issues will only be resolved as supplier investment in new capacities comes online over the next 12-18 months and so we expect some level of shortages will continue through to the end of the year and beyond,” the JLR statement noted.
“While the present supply constraints continue, the company will continue to prioritize production of higher-margin vehicles for the chip supply available as well as make chip and product specification changes wherever possible to reduce the impact,” it said.
“In the scenario above, we expect an operating cash outflow of about £1 billion with a negative EBIT (earnings before interest and taxes) margin in the second quarter and a substantial improvement in underlying* operating cash flow in the second half of the financial year as chip supply improves,” the automaker said.
