The Hindu Business Line : Tata Investment Corporation: Buy

This listed-investment arm of the Tata group is an attractive portfolio candidate. The stock trades at a substantial discount to the value of the investment book.

This provides a high degree of cushion for investors, and even if the stock price were to decline due to any near-term factors, more value buying will emerge quickly and reduce the risks. Buy this stock with a three-to-five year perspective.

The dividend yield is about two per cent. This coupled with the likelihood of a steady expansion in dividend payout also enhances the attractiveness of this stock.

It may also be a good defensive option to play now, as equities may be headed for a period of high volatility and a corrective phase.

Tata Investment owns shares in a host of Tata group companies in addition to other exposures.

With a portfolio in excess of Rs 1,500 crore, investing in this stock is akin to taking exposures in a close-end fund. About 60 per cent of the investment is in equities.

The value per share of the investment book as of March 2005 was about Rs 430. Given the robust trends in the prices of stocks, especially large-caps over the past year and the continued fancy for Tata group stocks, we expect the value to be at least in the vicinity of Rs 650; the discount embedded at current market price of stock will be about 30 per cent on a conservative basis.

Investors who buy this share will have to show a high degree of patience, hold it through choppy phases of the market and have an investment horizon that will neutralise the effects of sluggish phases in the market. They should use any price weakness as a buying opportunity.

This is one of the rare stocks where a `buy and hold' strategy has and will pay rich dividend.

We have been bullish on this stock for the past three years and have multiple buy recommendations outstanding, with the latest at Rs 300 in October 2005.

This view is unaltered even though equity prices have run up sharply. Reiterate Buy.

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Tata Investment Corporation: Buy

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