Technically, TATA MOTORS (CMP: 561) has immediate support level of 553-545 zone & sustain below that, 520-512 area may provide positional support as of now.
In fact, after the recent spate of corrections on the back of poor Q3 results & monthly sales data and rights issue plan, it took support from 518 zone last week on the back of market rumour of selling its majority stake in its auto designing unit, Tata Tech (although denied by the company yesterday).
Going forward, TATA MOTORS has to sustain over 576-580 zone for immediate target of 592 and its short term target should be 600 territory. Its mid term target should be 640-650 zone & long term target may be 700 area (for this it has to give consecutive closing above 620).
TATA MOTORS is in mega expansion plan in various products (new models) launches in CV & PV category in the next few years (FY-18). Its also giving tremendous thrusts in new product designing & innovation to adapt the changing demand scenario of the car industry and build its brand image, specially in the PV sector. Its also actively considering various options to deleverage its balance sheet and raise funds by selling its majority stake in non-core business and invest that proceeds in India operations. The recent rights issue of 7500 Cr is also a step in the direction to fund its mega expansion plan. In short, its eying at least the No-3 spot after Maruti & Hyundai in the Indian auto market within next few years. Its also is very active in procuring orders from defence.
TATA MOTORS is now concentrating more on PV market, thanks to initiative by Ex-Maruti executive. With the overall expected improvement of auto markets in India, thanks to "Shinning India" story, TATA MOTORS may be one of the major beneficiary in both CV & PV markets. Globally, it could also fare well, as we are clearly out of global recession and there is no significant China slow down.
As par BG metrics of quick TF (techno/funda) valuation, median value of TATA MOTORS is around 560 (considering current TTM EPS of around 48) and projected median value is around 700 (by considering projected FWD EPS of around 75 by FY:17-18) under the current market conditions.
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LONG TERM | SHORT TERM | MEDIAN VALUE | 200-DEMA | 10-DEMA |
| TATAMOTORS | 47.67 | 203.82 | 12.18 | 545.53 | 567.43 | 556.48 | 512.56 | 554.54 |
| TATAMOTORS | 75 | 203.82 | 12.18 | 684.27 | 711.74 | 698.00 | 512.56 | 554.54 |
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