At 10:56 am, Tata Motors had erased its early morning gain and was trading 4 per cent higher at Rs 180 on the BSE. In comparison, the S&P BSE Sensex was up 0.83 per cent at 40,916 points.
The trading volumes on the Tata Motors counter jumped 1.25 times with a combined 52 million equity shares changing hands on the counter, against a two-week average of around 40 million shares on the NSE and BSE.
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A possible deal will end the uncertainty as Tata Motors derive a big chunk of their business from the UK. Tata Motors, which owns the UK-based Jaguar Land Rover (JLR) brands of luxury cars.
“Over the last three years, JLR has suffered from an adverse product/market mix and higher capex, resulting in negative FCFF over FY18-20. JLR has been focused on cutting capex/cost, benefits of which have started to reflect now. Finally, the mix is normalizing with a recovery in LR and China. On the other hand, India business appears to have bottomed out in 2QFY20, although a full-blown recovery may be a few quarters away,” analysts at Motilal Oswal Securiteis said in company update. The brokerage firm maintains ‘buy’ rating on the stock with target price of Rs 195 per share.