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Tata Motors falls as core earnings fail to impress

On Thursday, a day after the automaker reported second-quarter core earnings, shares of Tata Motors fell as much as 5.5% that at least three analysts said missed their estimates due to higher expenses. The company posted a narrowed net loss for the July-September quarter and said its earnings before interest, taxes, depreciation and amortisation rose 53% year-over-year.

However, brokerage Jefferies said the company’s EBITDA came in 14% below its estimate, while Emkay Research and Motilal Oswal also said the number missed their estimates. The company’s performance was an all-around miss, Motilal Oswal analyst Jinesh Gandhi wrote in a note. Jaguar Land Rover continues to struggle with semiconductor shortages, which has been influencing its performance for the last 5-6 quarters.

Tata Motors stock was last down 4.4% at 414.25 rupees and was the biggest loser on India’s benchmark Nifty 50 index, which is down 0.7%. The company still expects cash flow to bounce back in the second half, thanks to healthy demand for its Jaguar Land Rover cars and a drop in domestic steel costs.As per the data from Refinitiv, the present average rating of 30 analysts covering the stock is buy and the median price target is 512 rupees.

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