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Tata Motors stock price plummeted to 5.4% in the morning to hit its 52-week low on Thursday as investors worried about the probable loss of business due to Brexit.
Jaguar Land Rover (JLR) said on Wednesday that a "hard Brexit" would cost him 1.2 billion pounds ($ 1.59 billion) a year, which would limit his future operations in the United Kingdom .
"We need greater certainty to continue investing heavily JLR's Managing Director, Ralf Speth, said in a statement
that Speth's comments come before a meeting on Friday between Prime Minister Theresa May and her ministers to decide on the strategy for Britain to negotiate its exit from the European Union, ending a 40-year trade relationship.
Uncertainty about what Britain really wants from the EU after its departure, the result of the ng is considered essential to progress in the discussions with the EU on the issue.
"A bad Brexit deal would cost Jaguar Land Rover more than 1.2 billion pounds of profit each year. As a result, we will have to radically adjust our spending profile; We have spent about 50 billion pounds in the UK in the last five years, with forecasts of 80 billion pounds more in the next five years, "said Speth in a statement
. title has been under pressure throughout the year, dropping more than 40% in 2018 so far, in addition to the 8.5% loss of the previous calendar year. continued correction of profits due to JLR (although domestic affairs improve) has increased pressure on the stock.
The consequent correction has made the stock attractive for brokerages still optimistic about the company
Nomura has maintained the Buy call on Tata Motors with a target price of Rs 495, which implies a potential upside of 85%.
JLR's US sales in June increased by 7% YoY estimate of 10 percent g
Land Rov he was supporting volumes with 21% year-over-year growth as Jaguar volumes continued to be weak, falling 20% year-over-year.
In June, Nomura expects a 3% growth Meanwhile, last month, JLR has highlighted its challenges and business strategies to move forward.
JLR has defined its strategy that aims to 1) increase its offer of advanced system of assistance to driving (ADAS) is shaping the industry; 2) to launch four new models thus bringing the total nameplate to 16 by FY24E; 3) focus on costs (via engineering capabilities, globalize supply and management of sales and administration costs) and; 4) improved financial performance (for the 19-21E fiscal year, its EBIT forecast maintained at 4-7% while the investment is expected to be 4.5 billion pounds a year ).
While having a Buy rating with a target price of Rs 355, ICICI Securities said that the huge investment will have a short-term impact on cash flow, although the same thing will improve , in the future. "TML is implementing a turnaround strategy in its standalone business. JLR's huge investment in FY19-21E will result in negative cash flow remaining a short-term concern."
In addition, given the uncertainty of diesel in the UK, the European markets persist the vehicle accounted for 87% of the volume in Q4FY18), the research center has reduced its turnover , its EBITDA and PAT estimate of approximately 7%, 8% and 9%, respectively
. ICICI Securities believes that JLR is making good progress in terms of future strategies.
He further believes that a lower demand than expected as a result of huge investment spending could have an additional impact on his financial performance and its impact on the environment.
At 09:36 o'clock, the price of the action was Rs 257.80, down 9.20 Rs, or 3.45% on the BSE.
( With entries from Reut ers )
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