This is an analysis of the news "TATA Motors may struggle to rev up hedging a drag" which appeared on 15th Feb, 2017 following the release of the financial statement for Q3 by TATA Motors.

2. “TATA MOTORS MAY STRUGGLE TO REV UP”
Source: economic times dated 15-02-2017
An Analysis by : 1. ABISHEK SANTHOSH RAJ A
2. ANOOP RAJAN MATHEW
3. DARSHANA GOGOI
4. GANESH KUMAR
5. JOSEPH ARNOULD MARIAN
6. MADDI BHADHRI NADH

3. THE NEWS
Revenues increased
Net profit falls 96% in Q3
Shares fall 10.3% - biggest decline in 5yrs
Jaguar Land Rover (JLR) misfires

4. TATA MOTORS
Established in 1945 by J R D Tata
CEO : Guenter Butschek
Chairman : Natarajan Chandrasekaran
Headquarters : Mumbai
Subsidiaries: JLR, Tata Daewoo, Tata Hispano
Net worth: $12.7 billion

5. JAGUAR LAND ROVER (JLR)
Acquired by TATA Motors in 2008
Contributes 83% of TATA Motors’ total revenue
Manufacturing units in UK, Slovakia, India and China
No 1 manufacturer in UK
Sales :
EUROPE CHINA UK US REST
21.6% 20.6% 19.3% 16.8% 21.7%

7. ANALYSIS ON TATA MOTOR’S
STRUGGLE TO REV UP
Unfavorable marketing expenses
Higher new model launch
Lower wholesale volumes
Surge in Variable cost

8. INCREASE IN EXPENSES

9. POSSIBLE REASONS FOR THE CAUSE-
GLOBAL
Tianjin Explosion
Brexit
Trump effect

10. IMPACT OF TIANJIN EXPLOSION
28th August 2015, Port Tianjin, China
5800 JLR’s destroyed
Incurred a loss of £154 mn
Spent £85 mn on recovery in FY16-17

11. IMPACT OF BREXIT
8 operations of JLR in UK
Estimated decrease in Revenue: £ 1.10 billion
10% levy on exports to Europe
4% levy on import of components
Fall in pounds sterling
Fall in share price

12. 126000
128000
130000
132000
134000
136000
138000
140000
2015-2016 2016-2017
Sales units of JLR-Q3
Sales: 6700 units decrease(5%)
0
20
40
60
80
100
2015-2016 2016-2017
Tax Paid
mn pounds
80% increase in tax

13. IMPACT OF DONALD TRUMP
US taxation policies- Border tax adjustments
Negative impact for automakers for sales
US accounts for 20% of subsidiary JLR
May hit EPS by 50%

14. SHARE PRICES WITH RESPECT TO THE
EVENTS-NASDAQ

15. POSSIBLE REASONS FOR THE CAUSE-
DOMESTIC
Ouster/Leadership of Mr. Cyrus Mistry
Demonetization effect
Tata Nano Project

16. IMPACT OF CYRUS MISTRY
Focused more on increasing EPS
Invested £3.1 billion in product creation
Lost £ 65 billion (TATA group) : poor investments
Set up innovation centres globally
Introduced 8 new products in FY 16-17
Stock fell by 16.4% after his ouster

17. INVESTMENT BY CYRUS MISTRY ON R&D

18. IMPACT OF TATA NANO PROJECT
Drain on financial resources
3000 Crores loss
2,50,000 cars are not on roads
8500 Crores cross holdings

19. IMPACT OF DEMONETIZATION
08th November,2016
Affected commercial and passenger vehicle sales
13% decline in sales
OEM’s were affected
Share price fell

20. SHARE PRICES WITH RESPECT TO THE
EVENTS-BSE/NSE
444
308.25
488
448
493
589
559
521
534.15
457.25
512
436
0
100
200
300
400
500
600
700
22/8/2015 24/8/2015 23/6/2016 24/6/2016 1/8/2016 1/9/2016 24/10/2016 27/10/2016 11-Nov 15/11/2016 9/2/2017 15/02/2017
SHAREPRICE
DATE
Share price
Tianjin
Explosion
Brexit Raise in sales of JLR Cyrus Mistry Demonetization/US
Elections
Release of Financial
Statements

21. TIME-LINE OF EVENTS
24th Oct 2016 -
ouster of Cyrus
Mistry
23th June 2016 -
Brexit
28th August 2015 –
Tianjan Explosion
8th Nov 2016 –
Demonetization
Nov 2016 – US
Elections(Tax
Policies)
Feb 2017 – Release
of Financial
Statement for Q3

22. BIBLIOGRAPHY
 The Economic Times
 Indian Express
 Business Line
 Tata motors press release for Q3
 JLR Automotive, Annual Report
2015-16
 Financial statement of Tata
Motors till Q3
 www.tatamotors.com
 www.forbes.com
 www.theguardian.com
www.moneycontrol.com
www.google.com
 www.nasdaq.com

23. THANK YOU