TTM - Tata Motors shares sinks as JLR expects to report a cash outflow of £1B and negative EBIT margin over chip shortage

Tata Motors ([[TTM]] -10.5%) expects the chip supply shortages in the second quarter to be greater than in the first quarter, resulting in 50% decline in production for Jaguar Land Rover in the September quarter."The present semiconductor supply issues represent a significant near-term challenge for the industry which will take time to work through but we are encouraged by the strong demand we see for when supply recovers,” said Thierry Bollore, chief executive officer, JLR.However,  the situation around the chip shortage is expected to improve in the second half of the current financial year.Cash balance at Jaguar Land Rover stood at £3.7B at the end of Q1, vs. £4.8B in March. In the scenario above, the company expects an operating cash outflow of about £1B pound with a negative EBIT margin in Q2.In Q1, JLR’s retail sales jumped 68.1% Y/Y to 1,24,537 vehicles.On YTD basis, Shares of Tata Motors have surged ~83%.Source

For further details see:

Tata Motors shares sinks as JLR expects to report a cash outflow of £1B and negative EBIT margin over chip shortage