Tata shares plunge despite huge profits

The Tata Motors share plunged 8pc to touch a low of Rs 253 despite declaring a 136pc jump in its quarter four net profits to Rs 6,234 Cr. The reason for the market disappointment was the inclusion of Rs 1800 Cr which was a onetime tax credit and the fact that the operating profit margin of its JLR unit, which contributes 95pc to the bottom line of the parent, has fallen. This is not an isolated case, as can be seen from the prices of different automobile manufacturers given below: COMPANY APR 30 May 30 % FALL MARUTI LTD 1399 1136 18.80 TATA MOTORS 317 250 21.14 ASHOK LEYLAND 32 25 22.00 M&M 710 650 8.45 HERO MOTOCORP 2241 1850 17.48 BAJAJ AUTO 1624 1511 6.96 The reasons for the above are global economic slowdown, the rising petrol prices in the country, rising interests cost and lower disposable income.