timesinternet.in ET Intelligence Group: Shares of Tata Motors, India’s largest truck maker and owner of the Jaguar-LandRover(JLR)brands, may extend losses suffered in the after math of disappointing December results, as reverses from commodity hedges limit prospectsof marginexpansionat the country’s most globalised automotive company.
A 510 basis-point drop in the operating profit (EBITDA) margin of JLR stumped investors and analysts, who had not penciled in contraction in the business that had hitherto helped offset Tata Motors’ lackluster domestic per-
formance. Lower wholesale volumes, less favourable product mix, higher variable marketing expenses and wages, and more new-model launches depressed the company’s earnings. Higher marketing costs and the phaseout of Discovery hit margins by 1.7% and 2%, respectively.
Although many of these factors may not be simultaneously at play over the subsequent quarters, Tata Motors’ ability to drive marginshigherwillbelimitedby the contractual hedges taken to offset currency and commodity-