Shares of Tata Motors jumped over 5 per cent after a media report suggested that the company’s luxury unit Jaguar Land Rover said that plans to cut thousands of jobs early next year, as part of a turnaround strategy.
Reacting to the news, shares of the auto major gained as much as 5.39 per cent to touch an intra-day high of Rs 175.90 apiece on the Bombay Stock Exchange, after opening marginally higher at Rs 167.40 against previous closing of Rs 166.90.
In a similar trend, stocks of the company were trading at Rs 173.00, up 3.62 per cent on the National Stock Exchange.
According to a report in the Financial Times, Jaguar Land Rover, Britain’s biggest carmaker owned by Tata Motors, will announce the measures in January as part of a three-year cost-cutting program.
The company, which employs 40,000 in the UK, has decided to cut down its workforce to combat Brexit’s impact on business, declining sales in China and a fall in demand for diesel cars.
For the three-month period ending 30 September 2018, JLR’s retail sales declined 13.2 per cent year-on-year to 129,887 vehicles due to fall in sales in China, where demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US. The company reported revenues of 5.6 billion pound and a pre-tax loss of 90 million pound, mainly reflecting lower sales. Earnings before interest, tax and depreciation (EBITDA) were 511 million pound, equivalent to a margin of 9.1 per cent.
Meanwhile, Tata Motors reported a loss of Rs 1,048.80 crore for the second consecutive quarter ended September 30, dented by weak performance by JLR which contributed to the bulk of the earnings. The company had posted a profit of Rs 2,482.78 crore in the corresponding quarter last year.
The benchmark index BSE Sensex was trading 239.01 points, or 0.66 per cent, higher at 36,201.94.