9 hours ago
Shares of Tata Motors Ltd., the manufacturer of passenger and commercial vehicles, and the parent company of Luxury car maker Jaguar Land Rover (JLR), will be in focus again on Thursday, May 8, on reports of a potential trade deal.
According to a report in the New York Times, the US is set to announce an agreement with the UK on trade later this evening.
The deal was teased by US President Donald Trump in his post on Truth Social, stating that he will hold a news conference at 10 AM Washington time on Thursday, to discuss "a major trade deal with representatives of a big and highly respected country." However, he refused to name the country with which the deal is likely to be announced.
In case the deal is indeed announced with the UK, it could be a major positive for Jaguar Land Rover, as nearly one-fifth of its revenue comes from the US market. The company had paused shipments of its vehicles in April owing to the US imposing 25% tariffs on all auto imports. However, reports have suggested that shipments have resumed, but there has been no official confirmation from either JLR or Tata Motors in this regard.
Tata Motors shares were the top gainers on the Nifty 50 index on Wednesday due to two important triggers.
The first important trigger was the India-UK Free Trade Agreement (FTA) that was signed between the two countries on Tuesday evening, which can result in potentially higher sales for JLR in the Indian markets. The second trigger, although procedural, was positive, as shareholders approved the demerger of the Commercial Vehicle business into a separate, listed entity, with near consensus.
Shareholders of Tata Motors will now be entitled to receive one share of the commercial vehicle business, post the demerger, in lieu of one share held of the currently listed entity.
Brokerage firm Citi wrote in a note that after the reduction of automotive tariffs on imports from the UK into India, there could be a substantial reduction of up to 45% in prices of some premium models, including JLR.
"While absolute volumes are limited, it could gain market share from some of the European OEMs like Mercedes, BMW and Audi," the brokerage said.
Shares of Tata Motors ended 5.2% higher on Wednesday at ₹681.8, continuing its recovery from the 52-week low level of ₹535.
