Tata Motors crashes as Bexit happens

With Brexit happening, Tata Motors is a big loser today, currently down over 11% at Rs.433 and this is after an intra day low of Rs.425.

This fall in Tata Motors is understandable as this company derives its earnings now mainly from its Jaguar Land Rover sales from UK.

There is a report published in Reuters which had talked about the worst-case scenario if Brexit happens. And as per this document, Jaguar Land Rover could see a $1.47 billion or 1 billion pounds cut in its profitability by the end of the decade. Reuters has reported that the 1 billion pound decline in pre-tax profit by 2020 would apply if Britain returned to World Trade Organisation rules for trade with Europe, involving a 10 percent tariff on exports and an inbound tariff of roughly 4 percent on components.

Thus as of now, we do not know the exact financial implications but surely, it will not be good.