Re: {LONGTERMINVESTORS} Tata Motors DVR & ORDINARY EQUITY SHARES .....thread....

 On TAMO 

JLR hedges it's exposure to the pound/euro. As of now they are about 70-80% hedged for this year, 50% for the next and some 30% for the year after that. So any impact from currency this year will be limited 

The company imports about 60% of its requirements from the euro region, however mgmt is planning to bring this down to 35-40% over the next couple of years. As of now they are expecting about 15% tariff on components. Again this will all depend on negotiations 

One major positive is upcoming plant in Slovakia. This is supposed to be operational in FY18 end, hence any impact from brexit at that time will be limited as they already might be servicing Europe from within Europe itself (ofcourse ramp up will take some time) 

As of now the target for JLR is 1 million vehicles to be sold by 2020. Looking at the pipeline of launches and introduction of gasoline engines on all models by this year, this is quite achievable 

JLR has developed its own in house engine and will be manufacturing these for their cars. As of now they are buying engines from ford. By next year most engines on all cars will be built by JLR hence they'll save on margins 

The China JV has been progressing well. At about 40-45% utilisation the pbt/vehicle from China is 35% more than the pbt/vehicle from other regions. Clearly China remains their most profitable region. Last year the stock was hammered on China worries, China seems to have stabilised for now, any incremental growth from here will be very positive 

Challenges remain on the domestic front. Loss of market share in CV space has forced the company to resort to heavy discounting. Response to Tiago has been encouraging but it will take some time and more launches to change the perception. On the bright side this is only a small part of their business. 

In a nut shell if the stock comes to lower levels over brexit fears one should capitalise on the opportunity 

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