The Hindu Business Line : Tata Motors betting on capex plans

The Tata Motors stock is expected to pull along, buoyed by demand for its products, both commercial vehicles and passenger cars. The company, the largest commercial vehicles player, has lately developed capabilities in the passenger car segment, commanding about 15 per cent of it. The two businesses are expected to grow at about 10-12 per cent over the next few years, marketmen indicate, adding that Tata Motors has put in place a capex plan of about Rs 100 billion for the next 3-4 years.

However, increase in interest rates has led to confusing signals from among a section of CV buyers. An impact on the demand for CVs is not ruled out in the short-to-medium term. At current market price of Rs 687 or so, the stock trades at 13x on fiscal 2008 estimated and 12x on fiscal 2009 estimated on standalone earnings. On Friday, the stock closed at Rs 684.30 on the NSE, a marginal change of 0.47 per cent over the previous day's close. The 52-week high for the stock is Rs 988.40.

Nilanjan Dey

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