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Subdued sales, Q3 results dent auto stocks; Tata Motors down 17% (Lead)
Mumbai, Feb 8 (IANS) High interest cost and financing constraints continued to slow down the overall sales of the Indian automobile industry, denting not just company performances but also equity prices.
The grim picture of sales downtrend in the segment has been reflected in most of the third quarter results declared by the automobile companies so far.
The Tata Motors, including the performance of JLR, reported a consolidated net loss of Rs 26,961 crore on Thursday. The company stock emerged as the top loser on the Bombay Stock Exchange (BSE) on Friday. The company’s scrip closed at Rs 151.30 a share, down Rs 31.60, or 17.28 per cent, from its previous close on the BSE.
According to the group, its net profit was impacted by an exceptional item of “Asset Impairment” in Jaguar Land Rover (JLR) worth Rs 27,838 crore (3.1 billion pounds).
However, on the standalone basis, the company — Tata Motors — reported healthy quarterly numbers. Its net profit during the quarter under review rose to Rs 617.62 crore, from Rs 211.59 crore reported for the corresponding quarter of the previous year.
The BSE auto index declined over 3 per cent. Other major losers included MRF, Eicher Motors and Motherson Sumi.
Deepak Jasani, Head-Retail Research, HDFC Securities, said: “After the Thursday’s jump in the auto stocks owing to the rate cut, investors took to booking profit.”
Besides, the data from the Society of Indian Automobile Manufacturers (SIAM) showed that overall sales in January fell 4.68 per cent to 2,019,331 units.
The data revealed that sales of passenger vehicles in the domestic market declined by 1.87 per cent on a year-on-year basis in January to 280,125 units.
Announcing the fiscal’s final bi-monthly monetary policy review on Thursday, the Reserve Bank of India (RBI) had noted that “high-frequency indicators of the services sector suggest some moderation in the pace of activity”.
The central bank said that the sales of motorcycles and tractors imply weakening of rural demand in December, while the those of passenger cars, which are an indicator of urban demand, contracted, “possibly reflecting volatility in fuel prices and mandated long-term insurance premium payments”.
“Commercial vehicle sales also shrank in December 2018 from a high base of the previous year,” the RBI said.
According to Grant Thornton India Partner Sridhar V: “The overall performance has dipped on a YoY basis which indicates the struggle the sector is going through on account of continuing negative factors like financing availability, pricing and cost of finance the past few months.
“These conditions have shown some improvement, which has resulted in the month on month trend showing a significant positive movement, which indicates improvement in sentiments as well. With RBI relaxing interest rates by 0.25 per cent, we can expect to have a positive improvement.”
Recently, brokerage house Centrum Research in a note said that country’s passenger vehicle (PV) segment might miss growth expectations of 7-9 per cent in FY19 due to tight liquidity conditions and high interest cost.
In a research note on January automobile sales — 2019 Starts in the Slow Lane — the brokerage house said that higher inventory levels, low consumer sentiment, tough market conditions and tight liquidity dampened sales in the domestic auto market during January 2019.
“Elections and low consumer market sentiment could continue to keep growth in PVs under check in the coming months as well,” the note said.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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