JLR guides lower margins; stock declines

JLR guides lower margins; stock declinesTata Motors has warned investors that the third-quarter margins of its UK-based subsidiary Jaguar Land Rover (JLR) could squeeze on account of adverse exchange rates.

The manufacturer said that that the luxury car brand could suffer decline in EBITDA margin mainly due to less favorable exchange rates, the effect of a higher mix of Evoque sales along with other factors.

Tata Motors said in a statement, "EBITDA is likely to be in the region of levels reported for the previous two quarters and EBITDA margin is likely to be slightly lower than in the previous two quarters."

The warning came despite the brand clocked more retail sales during the October to December quarter than the previous two quarters. JLR sold 88,658 units in the three months under review as against 84,749 units and 85,758 units in the second and first quarters, respectively.

UK-based Jaguar Land Rover accounts for around 90 per cent of Tata Motors' total profits.

The warning led to fall in the price of the stock. The stock slipped 10 per cent on the Bombay Stock Exchange (BSE) in the opening trade before recovering and closing at Rs 293.55 a share, at a loss of 6 per cent compared with the previous day's close. A day earlier on Wednesday, the company's NYSE-listed ADRs shed 10 per cent to close at $26.99.

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