The Hindu Business Line : Select players see `long-term' opportunity in Tata Motors

THE Tata Motors counter is a target of cautiously optimistic long-term investment strategy of some market players as it consolidates at a relatively lower level. The stock today touched a session's high at Rs 427, but finished at Rs 414, down by 1.51 per cent on the BSE with a traded quantity of around 2.18 lakh shares.

According to industry analysts, the Daewoo plant, which it acquired recently, has shown decent growth in sales. Moreover, Tata group moved further ahead in achieving their intention of bringing the high tonnage truck technology to India some time later this year.

On the other hand, the 21 per cent stake in the Spanish bus manufacturing company is understood to be paying off the desired goal of making inroads in geographies such as Europe and Africa.

The Tata-Daewoo CVs have already entered Africa. "In the next few quarters, exports expected to surge ahead at an accelerated pace. Further consolidation and firmer grip over the Spanish outfit (Tatas have option to buyout the remaining 79 per cent stake), Tata Motors would eventually wish to marry off its chassis with the Spanish technology to products for Asia and other emerging markets," an observer commented.

According to Mr Gul Teckchandani, an investment strategist, in the domestic market rapidly improving economic environment and growth of highways and feeder roads are definitely going to be positive for commercial vehicle manufacturers. "Tata Motors is in the best position to take advantage of this unfolding opportunity at home with its wide sales and service points," he added.

Mr Nikhil Thacker of Ashit C Mehta, new developments (Rs 1 lakh passenger car project on track and 40 tonne CV to roll on), more stress on cost cuts and long-term contracts for supplies are expected to keep Tata Motors' momentum intact despite certain pressure of rising petroleum prices and some disruption component supply chain management due to change in schedules of implementation of fuel emission norms.

According to a fund manager, for the stock the upside resistances are likely to be removed in the forthcoming quarters while the downside risks are largely limited and protected.

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