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Tata Motors falls after warning on JLR margin

Shares of Tata Motors (TTM) fell sharply yesterday after the company issued some preliminary data on its Jaguar Land Rover unit for the December 2012 quarter. Tata announced that for the quarter total retail sales at the JLR unit were 88,658 units and total wholesale sales were 94,828 units, both up from the previous two quarters. The company also said it expects to report revenue that will be higher than the previous two quarters, reflecting the higher sales volumes. However, Tata stated EBITDA is likely to be in the region of levels reported for the previous two quarters and EBITDA margin is likely to be slightly lower than in the previous two quarters, primarily reflecting less favorable exchange rates, the ongoing effect of a higher mix of Evoque sales and other factors. Tata also said it continues to have a longer term capital spending target of 10-12% of revenue, which it believes is in line with other premium competitors, but in the near and medium term, the company expects its capital spending to be a greater percentage of revenue in order to realize its present growth opportunities. In U.S. trading on Wednesday, Tata Motors' American Depository Receipts declined $2.96, or 9.88%, to $26.99.