Tata Motors dividend low, Cyrus Mistry says ‘instant gratification’ not possible

Tata Motors chairman Cyrus Mistry on Tuesday told the company’s shareholders’ that they should not be disappointed with the low dividend the company is paying them for FY16, but should see the development that operationally things are improving for the company. Mistry was addressing the company’s 71st annual general meeting.

In May, Tata Motors had informed the BSE that its board of directors at its meeting held on May 30, 2016, has recommended a dividend of R0.20 per ordinary share of R2 each and a dividend of R0.30 per ‘A’ ordinary share of R2 each for the financial year ended March 31, 2016, subject to the approval of the shareholders at the ensuing 71st AGM of the Company.

The dividend, if approved by the shareholders at the ensuing AGM, will be paid on and from August 11, 2016.

Mistry also indicated that due to JLR’s upcoming manufacturing capacities in Slovakia, Brazil and the recent one which has come up in China, it will not experience any adverse impact of Brexit.

Tata Motors’ has been facing tough times both in the commercial and passenger vehicles business and the company has invested on the research and development of the future products in order to gain market share in the domestic market.

Mistry indicated towards the high disruption in the automobiles market with regards to technology, as a result of which the company has heavily invested in the future products of Jaguar and Land Rover and Tata Motors’ domestic business.

The company has earmarked 3.75 billion pounds as the capital expenditure for the year.

“We have more work to do and there can be no instant gratification. Tata Motors cannot perform turn around tomorrow and anyone who has invested in the company should have a long term approach,” Mistry said.

He also allayed fears of the investors who were apprehensive of the adverse impacts of the Brexit by pointing towards the new facilities in Slovakia, Brazil and China from where the the company will be distributing its vehicles all around the world.

Apart from the above mentioned topics the chairman also said that the company has increased its efficiency in customer service and was working to improve the commercialisation of the products launched or about to be launched.