Bloomberg News

Tata Motors Drops in U.S. as China Slowdown Sinks ADRs

April 15, 2013

Indian stocks in New York fell to the lowest level since November as slowing Chinese growth clouded the global economic outlook. Tata Motors Ltd. (TTMT) sank the most in two months and Infosys Ltd. (INFO) dropped to a 2013 low.

The Bank of New York Mellon index of Indian companies’ American depositary receipts slid 2.3 percent to 998.68, after tumbling 8.6 percent April 12. Tata Motors (TTM:US) dropped after Moody’s Investors Service said the company’s share of the passenger- vehicle market has declined. ADRs of Infosys, the South Asian nation’s second-largest software services exporter, extended last week’s 17 percent loss after projecting revenue growth that fell short of analysts’ estimates.

Indian ADRs defied a 0.6 percent rally in the S&P BSE India Sensex India in Mumbai, as domestic equities climbed on speculation slowing inflation will spur interest-rate cuts. China’s economy, Asia’s largest, expanded 7.7 percent from a year earlier in the first quarter, below the 8 percent median forecast of economists surveyed by Bloomberg and slowing from a 7.9 percent rate in the previous three months.

Indian ADRs slipped in “a global selloff, which is caused mostly by China’s weaker GDP data as well as soft U.S. data,” Gregory Lesko, managing director at Deltec Asset Management LLC where he helps manage about $750 million, said by e-mail in New York. “Tata had some negative comment from Moody’s, and Infosys (INFY:US) followed through after its bad forecast numbers given last week.”

Discount Swells

Tata Motors’ ADRs fell 4.8 percent to $24.01 in New York yesterday for the steepest one-day loss since Feb. 14. The ADRs traded 2.9 percent below (TTM:US) the company’s Indian shares, the widest discount since Jan. 23. Each ADR represents five underlying shares in the Mumbai-based automaker. The MSCI Emerging Markets Index (MXEF) slipped 1.9 percent in a second day of declines.

The company’s share of the passenger-vehicle market has dropped to 11.8 percent from 14.2 percent since the year ended March 31, Moody’s Associate Analyst George Teng wrote in a report today. Longer-term erosion of market share will lead to weaker operating performance and key financial metrics, according to the note.

Infosys slid 3.2 percent to $41.71 in New York, the lowest level since Dec. 27. The 3 percent discount on the ADRs to the company’s domestic stock was the most (INFY:US) in nine months.

Antique Stock Broking Ltd. cut its recommendation on Infosys to hold from buy, while Kim Eng Securities Pte Ltd. downgraded it to sell from buy today after the Bangalore-based company said sales in the year that started April 1 will grow as much as 10 percent, missing the median 13 percent estimated by 66 analysts surveyed by Bloomberg.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net


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Companies Mentioned

  • TTM
    (Tata Motors Ltd)
    • $41.37 USD
    • 0.24
    • 0.58%
  • INFY
    (Infosys Ltd)
    • $31.8 USD
    • 0.06
    • 0.19%
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