Tata Motors half of Maruti in m-cap

Firm loses ~10k-cr market cap on Thursday

Once the country's most-valued auto maker, Tata Motors now commands a market cap less than half to Maruti Suzuki’s. The company saw its market value erode by over ~10,000 crore on Thursday with its stock crashing more than eight per cent, a day after first quarter financial results were announced.

Tata Motors’ scrip hit a 52week-low of ~376 on Thursday and closed at ~380.90, down 8.6 per cent at BSE. In effect, it has lost market value worth ~62,850 crore in the past 11 months.

The country’s biggest carmaker Maruti Suzuki, which overtook Tata Motors to become the country’s most-valued auto maker in July 2015, now commands a market cap of ~229,309 crore. The stock has surged 39 per cent since January this year and now also values more than the combined market cap (~196,273 crore) of the two peer companies — Tata Motors (~109,979 crore) and Mahindra & Mahindra (~86,294 crore).

Tata Motors reported a consolidated profit of ~3,200 crore for the April-June quarter, 42 per cent higher to previous year due to a one-time gain of ~3,609 crore from Jaguar Land Rover’s pension plans.

The standalone business (which primarily includes the domestic commercial and passenger vehicle) reported a loss of ~467 crore, against ~26-crore profit in the corresponding period of previous year. High discounts and declining volumes in the commercial vehicle business impacted the company’s performance. Margin pressures in both the standalone business ( due to declining volumes and heightened discounting) and JLR (on account of higher material costs and variable marketing expenses particularly in the US market) led to operating profit almost halving on a year-on-year basis in the quarter.

Brokerage firm Sharekhan maintains a ‘neutral’ view on the stock. Analysts have slashed earnings FY18 and FY19 forecasts for the company. Most analysts continue to give a ‘buy’ call for Maruti Suzuki, which is clocking a double-digit growth in car sales year after year.