Shares of Tata Motors reported lukewarm earnings. Know why

Tata Motors Ltd., India's top vehicle maker, reported a tepid set of earnings mainly on account of lower unit sales of luxury vehicles.

Tata Motors said its first quarter consolidated profit fell 49 percent to 2,769 crore rupees compared with 5,398 crore in the year ago period. Its Sales during April-June slipped 5.7 percent to 61,020 crore rupees from 64,683 crore rupees in the same period a year ago as it sold lesser Jaguars and Land Rovers.

Sales of JLR vehicles fell 3.7 percent on year to 110,648 vehicles in the past three months, the company said in a release to the exchanges. Tata said it saw initial signs of recovery in the local sales of medium to heavy vehicles, which saw strong revenue growth.

The results were announced after markets shut for Friday.

Shares of Tata Motors closed 10.30 rupees, or 2.7 percent higher, at 393.40 rupees on the National Stock Exchange, ahead of the earnings. Nearly 1.07 crore shares were traded compared with a 5-day average of 71 lakh shares.

Tata Motors' market capitalisation has fallen 23 percent in the past three months to 1.33 lakh crore rupees on fears of a protracted slowdown in Chinese markets, the main home to JLR sales.

Image credit: Indiatimes