Tata Motors share price slid over 6 per cent to hit their biggest intraday per cent drop since May 24 after US President Donald Trump on Friday threatened to escalate a trade war with Europe by imposing a 20 per cent tariff on all US imports of European Union-assembled cars.

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Reacting to the news, Tata Motors stock tanked as much as 6.5 per cent to Rs 288 on the BSE. The stock has fallen nearly 30 per cent so far this year.  

Trump tweeted about imposing tariffs on EU cars after European Union reprisals took effect against US tariffs on European steel and aluminum, targeting $3.2 bln in American goods exported to the 28-member bloc.

Analysts believe Jaguar Land Rover (JLR) vehicles exported to the United States will take a big hit if indeed Trump goes on with imposing auto tariffs.

JLR, Britain’s biggest automaker, is the company’s largest business which contributed nearly 77 per cent to Tata Motors’ total revenue in the year ended March 31, 2018.

Meanwhile, brokerage Edelweiss Securities maintained 'hold' rating on the stock following management commentary during JLR’s investor day last week.

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"We appreciate JLR’s efforts and capabilities on various technological aspects, enabling\ it to now be at the forefront of disruption in the global automobile industry. While FCF is likely to remain negative, we expect sharp dip from ~GBP1.2bn in FY18 to ~GBP100mn in FY20," said Edelweiss in a research note dated June 25, 2018. 

The brokerage maintained ‘HOLD/SP’ on Tata Motors, valuing India at 8x FY20E EBIDTA and JLR at 5.5x EBIT.