Tata Motors came out with very bad number on all fronts.
Company is struggling on domestic heavy vehicle segment and losing market
share. In order to push their product, company incurred cost is high which
resulted in heavy domestic loss. Company jewel Jaguar and Land Rovers showed
higher volume and growth but unfavourable mix of product and huge hedge losses
resulted in lower profit. Based on the conference call with analyst, company
clarified that it may take 2 to 4 quarter to come out of hedge loss issue.
Another hanging threat is US President warning to foreign
car players to set up factories in high cost USA geography to access US market
or he will impose 35% tax on imported cars. Unfortunately Tata Motors Jaguar
and Land Rovers factories are in China, India and Europe. Post result Tata Motors shares are already down by 14% and
it is expected that it will correct another 25% in next 3 weeks before it start
forming it's lower bottom.
It is advisable that investor should get out the Tata Motors
and wait for lower levels to re enter on long term basis. It is also expected
that Tata Motors will be very volatile in F&O market and retail investor
must refrain from entering into F&O segment. Watch out for 300 to 320 level
before returning back.
Disclaimer:
Please consult your financial advisor before investing or existing
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