Shares of Tata Motors fell over 5% their biggest intraday percent loss since March 16 on reports that Britain's biggest carmaker Jaguar Land Rover will cut around 1,000 jobs and production at two of its English factories due to fall in sales caused by uncertainty around Brexit and confusion over diesel policy.
The stock closed 4.61% or 16.67 points lower at 340 level on BSE. On NSE, the stock ended down 4.79%. Tata Motors was the top loser on Sensex and Nifty.
"Stock may react negatively to this announcement, we don't see it as a new negative development, " said Macquarie.
Car demand in the UK and Europe is facing multiple headwinds and these cost reduction initiatives are the co's response.
Macquarie has retained its 'outperform' rating for the stock, saying market was ascribing nearly zero value to the JLR business at the current stock price
The luxury carmaker said the "review" of its production schedules is being undertaken to ensure market demand is balanced globally and that it will lay out its 2018-19 production plans to the workforce on Monday.
"In light of the continuing headwinds impacting the car industry, we are making some adjustments to our production schedules and the level of agency staff," a JLR statement said.
"We are however continuing to recruit large numbers of highly skilled engineers, graduates and apprentices as we over-proportionally invest in new products and technologies, it added.
The company stressed it remains committed to its UK plants, having invested more than 4 billion pounds since 2010 to future-proof manufacturing technologies to deliver new models.
Solihull and the nearby Castle Bromwich site are expected to be hit by production cuts. There are 3,200 people employed at the Castle Bromwich site and a further 10,000 at Solihull.
The job cuts are expected largely at Solihull in the West Midlands region of England, with mostly agency staff not having their contracts renewed. JLR employs around 40,000 people across six sites in the UK.