- 28 Nov 2022
- ICICIdirect Research
Production cut at foreign subsidiary JLR
TATAMOTORS - 1111 Change: -10.30 (-0.92 %)News:
As per media sources Tata Motors owned Jaguar Land Rover (JLR) is likely to cut production in its UK factories till March 23 citing persistent chip supply shortages and will focus on more profitable models to balance profitability.
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This comes as negative surprise as during Q2FY23 results the company had guided about entering into long term contracts with suppliers to secure consistent supply of chips and gradual volume recovery from CY23 onwards. With such a development there exists a possibility that the company might not witness any meaningful volume growth in Q4FY23 on QoQ basis. It has already reduced its guidance for FCF & EBIT margins for FY23 as whole, which could be under further pressure amid such a development with open order book at JLR remaining healthy at >2 lakh units.
Impact:
Negative