Tata Group stocks hardest hit by Brexit, company loses Rs 30,00 crore in a day
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The Shares of
The salt-to-software giant currently has 19 companies operating in the UK, employing over 60,000 people.
The group's automotive unit in the UK, Jaguar Land Rover (JLR), itself will take a hit of $1.47 billion in the next four years owing to a 10% levy on vehicles sold in EU nations and 4% on imports of components.
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The Indian conglomerate entered the UK in 1907 and since 2000, through marquee acquisitions such as Tetley, JLR, Corus (
The diversified enterprise's biggest revenue generating unit in the UK is JLR, followed by TCS.
UK is the second largest contributor (nearly 16%) to the revenues of the software giant, which employs more than 11,000 people.
JLR, which was acquired in 2008, contributes nearly 90% to Tata Motors profits.
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JLR derives 20% of its sales volumes and sources 35-40% of its components from EU member nations. With the UK exiting the EU, the cost of sourcing components from the European states and selling its vehicles in the region will go up as duties and tariffs coming into play. On the flip side, analysts said
JLR will be a major beneficiary as the government will provide incentives to ensure that the UK's automotive industry remains competitive.
Also, the depreciation of the pound could positively benefit the company's earnings through exports.
With respect to the sale of Tata Steel UK, Financial Times, quoting unnamed sources, said there will now be "recalibration" after Brexit.
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The UK unit exports 12% of its volume to various EU member nations "If Britain were to exit the EU, Tata Steel would no longer be able to influence some of the major regulations such as environmental controls and anti-dumping measures which impact its UK operations," Tata Steel had said prior to Brexit. The EU referendum result could also bring about changes in British Pension Scheme, negatively impacting the unit's 11,000 employees.
Image: Indiatimes
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