Tata Motors declines on buzz JLR increases capex plans

Tata Motors fell 2.13% to Rs 369.75 at 11:23 IST on BSE on media reports that the company's UK subsidiary Jaguar Land Rover has increased its capital expenditure guidance for the fiscal year ending March 2015.

Meanwhile, the BSE Sensex was down 133.27 points, or 0.63%, to 21,038.14.

On BSE, so far 4.05 lakh shares were traded in the counter, compared with an average volume of 9.91 lakh shares in the past one quarter.

The stock hit a high of Rs 377 and a low of Rs 367.15 so far during the day. The stock hit a record high of Rs 405 on 28 November 2013. The stock hit a 52-week low of Rs 252.10 on 5 April 2013.

The stock had underperformed the market over the past one month till 11 December 2013, rising 0.17% compared with the Sensex's 3.32% rise. The scrip had also outperformed the market in past one quarter, rising 10.95% as against Sensex's 5.87% rise.

The large-cap company has an equity capital of Rs 643.72 crore. Face value per share is Rs 2.

According to reports, the capital expenditure (capex) at Jaguar Land Rover (JLR) will be increased to 3.5-3.7 billion pounds in the fiscal year ending March 2015 (FY2015), higher than its proposed capex of 2.75 billion pounds in the financial year ending March 2014 (FY2014).

The company intends to continue its investment plans towards new product development, new power trains and technologies to meet regulatory requirements, capacity expansion at existing UK facilities and setting up of new plants in China and Brazil, reports added.

Media reports suggested that the proposed increase in capex plan is a short-term negative for Tata Motors as it will increase the debt and will put pressure on free cash flow of the company.

Meanwhile, on Wednesday, 11 December 2013, JLR reported a 25% increase in its global sales at 37,403 units in November 2013 over November 2012.

November sales were strong for JLR in the China Region up 42%, North America up 37%, Asia Pacific up 32%, Europe up 7%, other overseas markets up 42%, with UK sales consistent with the previous year, JLR said in a statement.

Commenting on the November performance Andy Goss, JLR Group Sales Operations Director said: "November has been another solid month in what has so far, been a great year for Jaguar Land Rover. Our continued sales success is a testament to our sustained investment in new and exciting products which are driving growth internationally and attracting new customers to our brands".

Tata Motors' consolidated net profit surged 70.7% to Rs 3542 crore on 31.1% rise in revenues to Rs 56882 crore in Q2 September 2013 over Q2 September 2012.

Tata Motors is the leader in commercial vehicles in each segment, and among the top in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. It is also the world's fifth largest truck manufacturer and fourth largest bus manufacturer.

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