Tata Group's one of the most crucial subsidiaries, Tata Motors, has started the day on a calamitous note. In the early hours of trading on Monday, May 13, the wagon-making company lost 9.23 per cent or Rs 96.65 of its value, reaching 950.00 (10:51 IST).
Shares Drop After Downgrades
This comes barely a few days after the company declared its earnings for Q4. In the fiscal year 2024 (FY24), the company reported a revenue of Rs 437.9K crore. The company's net was Rs 31.8K crore, higher compared to the previous year.
The company even recommended a final dividend of Rs 3 per ordinary share and Rs 3.10 per.
According to a report from CNBC, this new development could be attributed to the multiple downgrades, that the company has received over the past few days, from certain reputed reputed entities. The rating firms, that have downgraded or readjusted their ratings for the company include UBS, Morgan Stanley, Jefferies, JP Morgan, Nomura and Goldman Sachs.
According to reports, these downgrades have largely attributed their ratings to weak earnings, and global factors, involving the demand for automobiles at large. Some of the entities pointed at the demand for its cars manufactured by its priced acquisition, Jaguar Land Rover, or JLR. | Mikes Photography/ pixabay
Overweight To Equalweight
In this, Morgan Stanley reportedly downgraded Tata Motors from overweight to equalweight. Meanwhile, Nomura moved it from Buy to Neutral. Interestingly, it is to be noted that Goldman Sachs has investments in the automobile sector, including its investment in ASK Automotive.
In fact, according to recent reports, Goldman Sachs will be investing USD 250 million in China's Geely, which makes Electric Vehicles. For Jeferries, it was last month when it switched 6 stocks in its portfolio.
One of the names that stood out was Maruti, which was replaced by Eicher. This perhaps indicates the group's lack of faith in the four-wheeler industry.
According to reports, these downgrades have largely attributed their ratings to weak earnings, and global factors, involving the demand for automobiles at large. Some of the entities pointed at the demand for its cars manufactured by its priced acquisition, Jaguar Land Rover, or JLR.
As a result of this development, Tata Motors has been trending on X (formerly Twitter) for the better part of the beginning of the day. With many of the users expressing their concerns with this development.
