Update at 4 PM: The stock markets ended with losses, giving up morning gains. The BSE Sensex closed 64 points lower at 30,301 while the NSE Nifty ended at 9,360, down 26 points.
Tata Motors, GAIL and Adani Ports ended with gains while the fall on the benchmark indices was led by L&T, Cipla and Dr Reddy's.
Read: Wipro issues 4 lakh equity shares under ESOPs; HCL Tech buyback at Rs. 1,000 per share
Original story:
Tata Motors was trading with significant gains on the Bombay Stock Exchange (BSE) on Wednesday in response to Q4 results that came better than estimates; the stock rose 5.11 percent to Rs. 472.95 and was up 3.68 percent at Rs. 467 at around 12.03 pm. The company said it will slash its managerial strength by 1,500 during the year as part of an organisational restructuring.
Other top gainers included GAIL (India), up 2.41 percent at Rs. 389.60 and Adani Ports, 1.54 percent higher at Rs. 337 while the BSE Sensex rebounded after Tuesday's losses to trade at 30,460, up 94 points while the NSE Nifty was trading with gains of 32 points at 9,418.
Brokerage Motilal Oswal Securities Ltd. (MOSL) has target price of Rs. 635 for Tata Motors, translating into a gain of 41 percent from its Tuesday close of Rs. 450.
JM Financial Research has a target price of Rs 600. "We maintain BUY with target price of INR 600. Higher-than-estimated stress in JLR volume/margin, prolonged weakness in India profits and adverse currency movements are key risks to our view," the brokerage said in its note.
"Exports and Defence segments will be boosted to minimize impact of cyclical nature of CV business. JLR volume growth will continue at a healthy pace supported by multiple new launches and healthy vehicle sales outlook in major markets," JM Financial Research added.
On Tuesday, the company reported that its Q4 consolidated net profit was Rs. 4,336 crore, down 17 percent from Rs 5,211 crore in the year-ago period, but higher than estimates by analysts. Sales came marginally lower at Rs. 77,272 crore as against Rs. 79,549 crore in the corresponding period last fiscal.
The company's luxury vehicle arm, Jaguar Land Rover (JLR), posted upbeat results for the quarter. Net profit rose 18 percent YoY to £557 million while sales grew 10 percent to £7,268 million.
"Jaguar Land Rover is pleased to end the fiscal year on a strong note in spite of the geopolitical and volatile economic environment. JLR believes that it has strong and exciting product actions and plans to continue to drive profitable and sustainable growth," Tata Motors said in a statement.
The luxury arm's robust financials led to a stock upgrade for Tata Motors.
"JLR's 4QFY17 performance has been very strong and has come earlier than our expectation. We had articulated drivers of improvement in operating performance from 2HFY18 in our recent detailed report. The stock trades at 14.6x/6.8x FY18E/FY19E consolidated EPS. We maintain Buy with TP of Rs. 635 (FY19 SOTP based)," MOSL said in a note.
Layoffs at Tata Motors
The company's managerial headcount is expected to fall by about 10 percent. "The reference (total managers) on which we started (the exercise) was in the vicinity of 13,000...we do see as far as the white collar population is concerned, an overall reduction in the vicinity of 10-12 per cent (up to 1,500)," MD& CEO Guenter Butschek said.
