Tata Motors dips 3% as Jaguar Land Rover CEO Thierry Bollore resigns

Shares of Tata Motors dipped 3 per cent to Rs 419.70 on the BSE in Thursday's intra-day trade after Jaguar Land Rover's (JLR's) Chief Executive Officer (CEO) Thierry Bolloré announced his resignation from the company on Wednesday for personal reasons. He will serve his last day on December 31, 2022.

"Upon cessation of his aforesaid employment with JLR, Thierry Bolloré has resigned as Non-Executive Non-Independent Director of Tata Motors w.e.f December 31, 2022," the company said in a regulatory exchange filing.

The company has appointed Adrian Mardell (acting CFO), who has been witn the company for the past 32 years, as the interim CEO.

Bolloré had been with the company for just over two years, replacing long time serving CEO at JLR Sir Ralf Speth. He had come with experience in companies like Michelin, and Renault among others.

At 11:51 am, Tata Motors erased nearly half of its intra-day losses and traded 1.7 per cent lower at Rs 424.10 on the BSE. In comparison, the S&P BSE Sensex was down 0.18 per cent at 61,866.

Meanwhile, in the past three months, Tata Motors has underperformed the market by falling 13 per cent, as compared to 2.7 per cent rise in the Sensex. Further, in the past one year, the stock has slipped 20 per cent as against 3 per cent gain in the benchmark index.

Tata Motors missed Street estimates for September quarter results for the 2022-23 financial year (Q2FY23), making analysts cautious on the pace of recovery going ahead as supply conditions ease and commodity prices start coming off.

Analysts at ICICI Securities have downgraded the stock from BUY to HOLD with a target price of Rs 465 per share on the back of muted volume, Ebit margin, and FCF guidance at JLR for FY23E with fundamental levers in place for healthy growth in domestic operations (CV, PV as well as EV space).

However, Emkay Global said JLR’s order book is strong at around 205,000 units, and models such as new generation RR/RR Sport and Defender form >70 per cent of the order book which should lead to product-mix improvement ahead.

"JLR production ramp-up is expected to improve at a slower pace in H2FY23 versus earlier expectations, due to supply constraints," analysts at Emkay Global Financial Services said in Q2FY23 result update.

The brokerage firm expects sales upcycle across segments, aggressive cost savings and debt reduction. "We reaffirm BUY on the stock, with SOTP-based target price of Rs 490 now (Rs 515 earlier), based on Dec-24 estimates (Sep-24E earlier)," analysts said.

Analysts at Prabhudas Lilladher also believes the company may see likely market share gains in PV segment (14.2 per cent vs 6.9 per cent in FY19) led by revamped portfolio, customer preference for SUVs and rising EV penetration, CV volumes gains from cyclical upturn, improving fleet utilization and freight rates and revival in JLR and strong order book to benefit and drive FCF generation. The brokerage firm has ‘buy’ rating on Tata Motors with target price of Rs 520 per share.