Tata Motors drops on weak sales in April

Tata Motors dropped 1.22% to Rs 452.20 at 11:00 IST on BSE after total sales of the company's passenger and commercial vehicles fell 21% at 30,972 units in April 2017 over April 2016.

The announcement was made yesterday, 1 May 2017, when markets were shut due to holiday.

Meanwhile, the BSE Sensex was down 20.86 points, or 0.08%, to 29,893.88.

The stock had risen 3.95% in five sessions to settle at Rs 457.80 on 28 April 2017, from a close of Rs 440.40 on 21 April 2017.

On the BSE, 1.26 lakh shares were traded in the counter so far, compared with average daily volumes of 5.91 lakh shares in the past one quarter. The stock had hit a high of Rs 457.80 and a low of Rs 451.10 so far during the day. The stock had hit a 52-week high of Rs 598.60 on 7 September 2016. The stock had hit a 52-week low of Rs 376.05 on 11 May 2016.

The stock had underperformed the market over the past one month till 28 April 2017, falling 3.09% compared with Sensex's 1.73% gains. The scrip had also underperformed the market in past one quarter, dropping 15.9% as against Sensex's 7.3% rise.

The large-cap company has equity capital of Rs 577.47 crore. Face value per share is Rs 2.

Tata Motors' domestic sales of Tata commercial and passenger vehicles fell 19% at 28,844 units in April 2017 over April 2016.

Tata Motors' passenger vehicles, in the domestic market, continued its growth momentum, rising 23% at 12,827 units in April 2017 over April 2016, due to an encouraging response for its recently launched lifestyle utility vehicles (UV), Tata HEXA and its latest styleback, the Tata TIGOR. The Tata TIAGO continues to maintain good order pipeline.

The commercial vehicles sales fell 36% at 16,017 units in April 2017 over April 2016. This is an unusual decline, in exceptional circumstances.

Tata Motors commercial vehicles were affected by the Supreme Court judgement announced on 29 March 2017, with the ban on BS III sales, leading to the need for a higher quantity of BS IV stock for April sales.

The higher demand at short notice was not met in production, as vendors struggled to meet with the higher demand, especially in the medium & heavy commercial vehicles (MHCV) segments. Moreover, after the strong pre-buying of BS III vehicles in March, and the price increase of BS IV vehicles-especially in the MHCV and buses at 8-10%, demand for BS IV vehicles was also weak.

Tata Motors expects production, wholesales and retails to pick up in May and June, it added.

Meanwhile, public sector oil marketing companies (PSU OMCs) announced a hike in petrol and diesel prices on 30 April 2017. PSU OMCs announced an increase in the price of petrol and diesel with effect from the midnight of 30 April/1 May 2017. Petrol price was hiked by Rs 0.01 per litre and diesel price was raised by Rs 0.44 a litre at Delhi (excluding state levies).

Tata Motors' consolidated net profit fell 96.2% to Rs 111.57 crore on 2.2% decline in net sales to Rs 66855.18 crore in Q3 December 2016 over Q3 December 2015.

Tata Motors is a market leader in commercial vehicles in India. The company's British luxury unit Jaguar Land Rover (JLR) sells premium luxury cars.

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