Understanding Brexit and Its Impacts On Indian & Global Economy

1. Presented By: Utsav Patel
Submitted to: RVM Finishing Schoo Pvt Ltd
www.rvmfinishingschool.com

2. As the word Suggest BREXIT= “Britain” and “Exit”.
Withdrawal of the United Kingdom from the
European Union.
The UK electorate will address the question again on
June 23, 2016, in a referendum on the country's
membership.
Meaning

3. Impact On India If they Exit
 Sensex and Nifty will tumble in the short-run.
 India is presently the second biggest source of FDI (Foreign Direct
Investment) for Great Britain. But, if Britain exits the EU, it will not be
as attractive a destination for Indian FDI as before.
 UK has always acted as a gate pass for Indian companies to access
the European companies, The total trade stood at $14.02 billion in
FY16, out of which $8.83 billion was in exports and $5.19 was in
imports.

4.  So on the event of Brexit, the pound rate might fall
against the dollar and thus, the rupee.
 the companies which have income from UK and
Europe are going to be hit, at least for shorter term.
 Indian pharma industry which has more exposure
towards Europe, will also be affected.
Contd..

5. 24%
8%
6% 6%
5% 5% 5%
4%
3%
34%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Textiles Machinery Jems & Jwells Auto Footwares Pharma Electric
Appliances
Iron & steel Lether
Products
Others
UK EXPORTS AS % OF TOTAL INDIAN EXPORTS
% Contribution
Source:Capitalmind

6. Indian Firms to look out for on the event of
Brexit.
Company Impact of Brexit
Tata Steel
Has turnover more than GBP 2 billion from UK Steel Plants. Has 12 production plants
spread across UK.
Tata Motors (Jaguar &Land Rover) Jaguar and land Rover are UK based and are UK’s largest automotive
manufacturers
Motherson Sumi
Have major Automotive Clients in Europe and derives more than half of its income
from Europe
Kitex Garments Kitex Garments client Mothercare derives 20% of revenue from UK
Tata Consultancy Services
For FY16, its Europe operation grew by 12.9% and UK by 8.23%. Europe and UK
together are major contributors to its revenue.
Bharat Forge Caters European automotive clients, Has 3 plants in Germany and 1 in UK
Tech Mahindra Has Banking and Financial Clients from UK, and acquired UK based firm Fintech
Bharat Airtel Has been rated by Grant Thornton as fastest growing Indian company in UK
Marksans Pharma UK and Europe market account for 60% of their revenue.
Emcure Pharma Has acquired UK based Tillomed Laboratories and still expanding

7. Impact On Global Economy If they Exit
 Global financial market volatility can be readily
expected. Markets across the world will tank.
 The pound will depreciate against most major
economies.
 Brexit could reduce economic growth by up to 5.6
percent over the next three years

8. What If…. Britain Exits Or Stays
 If Britain remain with EU Real GDP growth of 2.3% per annum over the period to
2030.
 If Britain leave Stock market falls, Debt interest rate rise.
 Brexit could cost UK economy 100 billion Euro which is equivalent to 5% of GDP by
2020.
 9,50,000 Job losses and Unemployment would increase by around 5,00,000.

9. Disclaimer:
 The presentation is for Educational Purpose Only and is submitted as a part OF
FATP( Financial Analyst Training Program)
 The report published should not be used for any financial decision making or as a
tool for advisory
 The vies of student “Utsav Patel” is personal and is from research done by him, only
for Educational Purpose and does not fall into copyright space
 For any details, you can write to us info@rvmfinishingschool.com