On Tuesday afternoon, Tata Motors Ltd shares were cruising along near their 52-week highs, as if problems such as the chip shortage were minor speed bumps. Tata Motors shares fell 12% from their intra-day highs soon after the stock exchanges published the profit warning. The massive cash outflow was largely due to the chip supply constraints, which hit production by about 30% in Q1. In mid-May, consulting firm AlixPartners had said the semiconductor chip shortage is expected to cost the global automobile industry $110 billion in revenue in 2021. Indeed, Tata Motors had been talking about the chip shortage for a while, and mentioned in a conference call in mid-May that things had worsened in Q1.

Source: Mint July 06, 2021 12:00 UTC