DNA Money Edit: Why is Tata Motors stock slipping?

Tata Tiago, a compact hatchback that won the hearts of customers with its value for money proposition, along with other brands such as Tigor and Nexon and its commercial vehicle business may have breathed fresh life into Tata Motors. But the domestic auto giant is staring at trouble as its British subsidiary Jaguar Land Rover (JLR) has been in the throes of a demand recession over the past few quarters due to continued uncertainties around diesel vehicles in Europe, deteriorating market conditions in China and the Brexit issue.

The sustained losses in the December quarter have forced the company to take a one-time exceptional non-cash charge for asset impairment of nearly 3.1 billion pounds, leading to its worst-ever consolidated quarterly loss of Rs 26,960.80 crore. Surely, it has not gone down well with the analysts and rating agencies.

Care Ratings on Monday downgraded the company's credit rating, citing deterioration in JLR performance and increase in leverage due to on-going capital expenditure planned for JLR's research and product development. In response, JLR has proposed £2.5 billion investment as part of its turnaround plan, but the fire fighting is not expected to be easy after the company recently slashed its global workforce by 4,500 people.

Going forward, challenging times may persist for Tata Motors. Analysts and rating agencies are unlikely to go for an upgrade until the global auto market picks up and Brexit settles.