Sehwag1830 Posted May 30, 2012 Share Posted May 30, 2012 Why did Tata Motors fall 10 % today ? Their market cap =78000 crore (today) Quarterly profit= Rs 4200 crore(removing tax credit from march quarter) P/E = 5 (current level) So despite having such a low P/E ratio at current level why did it fall ? Link to comment Share on other sites More sharing options...
bulbul Posted May 30, 2012 Share Posted May 30, 2012 may be some internal selling [some time employees in senior posiitons will cash in their ESOP] or some bad news.... but i dont know why u relate that to PE and Market cap... these things happen regulerly.. are u hoping for a Satyam :P Link to comment Share on other sites More sharing options...
Swing_n_Speed Posted May 30, 2012 Share Posted May 30, 2012 http://in.reuters.com/article/2012/05/30/tatamotors-shares-jlr-worries-idINDEE84T06E20120530 Basically 95% of the income this quarter has come in for JLR. and the reason the profits are so high is primarily owing to a one-off deferred tax gain worth about 1,888 crores. The trouble basically is that Tata Motors India has had sluggish growth and post the hike in excise duties analysts sales are not going to improve. Secondly JLR has had a flat April in terms of sales and once analysts about JLR sales for the coming quarter. And as you know the stock markets predict a price today for the future. So if they anticipate a dismal performance in the future, it will be factored into the price of the scrip today. It doesn't help matters when the Sensex as a whole is also pretty weak. Link to comment Share on other sites More sharing options...
Sehwag1830 Posted May 30, 2012 Author Share Posted May 30, 2012 I know all those things which you two have posted. But a 10% fall is simply unacceptable. There must be some other reason. Or may be people had over expectation. Link to comment Share on other sites More sharing options...
Swing_n_Speed Posted May 30, 2012 Share Posted May 30, 2012 Why do you say unacceptable? What is ur target price for the Tata Scrip? Link to comment Share on other sites More sharing options...
bulbul Posted May 30, 2012 Share Posted May 30, 2012 I know all those things which you two have posted. But a 10% fall is simply unacceptable. There must be some other reason. Or may be people had over expectation. common man real estate stocks usually fall 15-20% some times apparently for no reason which normal investors know... Link to comment Share on other sites More sharing options...
Sehwag1830 Posted May 30, 2012 Author Share Posted May 30, 2012 Why do you say unacceptable? What is ur target price for the Tata Scrip? I expect that if JLR sells 25000 per month and taking in account Tata motors Indian operation, they should easily get around 12000 crore annual profit. So my target price should be around Rs 330 or Rs 340. Their P/E ratio is too low. @Dumdumdiga: Major lol at comparing real estate price with stock price. Link to comment Share on other sites More sharing options...
bulbul Posted May 30, 2012 Share Posted May 30, 2012 I expect that if JLR sells 25000 per month and taking in account Tata motors Indian operation, they should easily get around 12000 crore annual profit. So my target price should be around Rs 330 or Rs 340. Their P/E ratio is too low. @Dumdumdiga: Major lol at comparing real estate price with stock price. i am talking about Real estate stocks [HDIL,DLF,Unitech etc]..not real estate price .. :dontknow: Link to comment Share on other sites More sharing options...
Sehwag1830 Posted May 30, 2012 Author Share Posted May 30, 2012 i am talking about Real estate stocks [HDIL' date=DLF,Unitech etc]..not real estate price .. :dontknow: Yes that can be somewhat comparable. The only explanation i can think of JLR losing market share and not even able to sell 25000 units per month. Link to comment Share on other sites More sharing options...
ravishingravi Posted May 30, 2012 Share Posted May 30, 2012 I have bought tata motors. They have some good projects. Link to comment Share on other sites More sharing options...
akshayxyz Posted May 30, 2012 Share Posted May 30, 2012 Interestingly, TM had +ive news in last 24 hours ( of this fall).......at least it looked +ive to me. So, may be some profit booking ( -10% is still too much), or some pre-calculated algorithmic trading scheduled to run on ~End of The Month. Link to comment Share on other sites More sharing options...
Ram Posted May 30, 2012 Share Posted May 30, 2012 Often times, when companies report record sales, it is accompanied by a significant drop in the stock price. Though this may sound counter-intuitive, there are several reasons for this, primary of them being profit booking by retail investors. Many small/retail investors sell stock when companies do well to cash in on the good news and to get a good profit out of it. Lets say I was small investor who bought the stock back in September '11 when it was selling at 140. The stock price has already doubled since then and the company reports record numbers and my first instinctive reaction will be - 'This is as good as it is going to get, lemme get the hell out while I can..' So there's a lot of profit booking and the stock price falls. But from a larger sense, as long as a company's fundamentals are sound, the price will be high, even though there could be some corrections occasionally. Link to comment Share on other sites More sharing options...
velu Posted May 31, 2012 Share Posted May 31, 2012 TM declared their Quarterly results and the results were below expectations. Link to comment Share on other sites More sharing options...
yoda Posted May 31, 2012 Share Posted May 31, 2012 I know all those things which you two have posted. But a 10% fall is simply unacceptable. There must be some other reason. Or may be people had over expectation. Dude, if you know all that he has posted about slowing down of the most profitable unit (JLR) and are still questioning the 10% drop, may be it is better than you don't know why it is dropping so much. :winky: Seriously speaking, anytime a company announces slowing of growth, that means dump in stock price, cause the current price typically factors in currently anticipated growth. Link to comment Share on other sites More sharing options...
Straight Drive Posted July 8, 2014 Share Posted July 8, 2014 Budget to be presented on 10th of July. Lets see how it impacts the stock market after it is presented. Link to comment Share on other sites More sharing options...
BlueBee Posted July 8, 2014 Share Posted July 8, 2014 O/T : They've rolled out their new Engine called Revotron Link to comment Share on other sites More sharing options...
Straight Drive Posted July 8, 2014 Share Posted July 8, 2014 BSE sensex seeing record peak of 26,190.44. Link to comment Share on other sites More sharing options...
jusarrived Posted July 8, 2014 Share Posted July 8, 2014 I think there is a small correction due in the Market . It may reach ~24500 which would be good levels to enter some stocks Link to comment Share on other sites More sharing options...
Straight Drive Posted July 8, 2014 Share Posted July 8, 2014 I think there is a small correction due in the Market . It may reach ~24500 which would be good levels to enter some stocks The market does expands as budget nears due to lot of expectations. However, it becomes impossible to fulfill the expectations of everyone and the markets correct themselves post budget. Further it goes on to returns back to it's mean due to correction. The market at the moment seems very unreliable due to unstable rupee. is this the signal for the next bear market. Bear market would be ideal for investment. Link to comment Share on other sites More sharing options...
randomGuy Posted July 8, 2014 Share Posted July 8, 2014 Dont think it will be a bear market. Now the June quarter results will start coming and the stocks will begin to rise. I guess these dips are a buying opportunity. Link to comment Share on other sites More sharing options...
Recommended Posts