Shares of Tata Motors plummeted on Wednesday, despite glowing reports of financial success from the company the day before.
How so? The company's profits may have more than doubled during the quarter ended March 31. But it turns out that a big whack came from a one-time tax benefit, and analysts were not too keen on the revelation that some 90 percent of profits came from Jaguar Land Rover.
(Don't tell Ford Motor Co., which sold JLR to Tata as a bonafide loser back in 2008).
On Wednesday morning, the Indian papers were filled with apparently positive news for Tata Motors. Mint, for instance, trumpeted "Tata Motors clocks highest profit growth in last four quarters," noting a 136 percent jump in profit and a massive sales increase from JLR in China.
However, by afternoon, Reuters reported that shares in Tata Motors dropped nearly 12 percent in the day's trading, losing more than $1.5 billion in market cap.
"The steep decline came even after Tata Motors said on Tuesday fiscal fourth quarter net profit had more than doubled, as it had been driven by a one-off tax gain," the news agency said.
Instead of the profit increase, "investors focused on the fall of operating margins at the luxury unit from 20.1 percent to 14.6 on a quarter-to-quarter basis," according to Reuters.
Interestingly, Tata Motors stock was up more than 50 percent on the year so far before today's drop, the agency said.