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Exit Tata Motors and Wait for Lower Level to Re-enter - Offered Dividend & Comment By Tata Son Chairman Mr. Mistry Indicate Rough Time Ahead

Tata Motors share price is sitting at its historical high and thanks to very robust sales of its Jaguar and Land Rover sales across different geographies. The robust growth prompted all analyst to recommend buying opportunity to make good return in short to medium term. This also prompted active F&O market which led the share price to shoot around 15% in the last 30 days. For a large cap like Tata motors share, such a steep rise in share price is worrisome. The reason is Mr. Mistry humble acceptance that FY17 will be challenging year for Tata Motors. He also confirmed loud and clear that China economy will be going downwards in coming month. He also pointed out that UK exit from EU will add more pain to Tata Motors given its headquarter is based out of UK.

On top of that during 71st AGM ofTata Motors, Investors clearly showed their displeasure about company offered dividend payout of INR .20 ($0.003). It is interesting to know that the market cap of Tata Motors is currently running at $30 Bn and domestic business is struggling given the non acceptance of some of the recent launches by Tata Motors.

It is advisable for the investor to book profit and sit on the sideline with cash. It is expected that Tata Motors share will correct in recent weeks and will come down to a level of 400 level. The committed capex by the Tata Motors towards the product development to new factories for Jaguar & Land Rover runs in Billions of $'s. The clever Investor should use this as an opportunity to sell at higher level an enter into lower level

Disclaimer - Consult your Financial advisor before investing
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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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