Tata Motors : Should Investors look at it seriously for investment

Tata Motors have not being doing well on bourses recently disappointing investors. Investors who have invested in tata motors have witnessed erosion in wealth whereas if an investor had preferred its peer company Maruti Suzuki  or Eicher Motors  he or she would have been merrier.

Tata Motors is trading at a PE of 7. Analysts believe it is trading at a compelling valuation and that investors should take a serious look at it. As per ET reports on analysts consensus ratings 92.90 percent have given Buy ratings , 3.60 percent have given Hold ratings and 3.60 percent have given Sell ratings.

The YTD returns for the stock has been negative i.e 24.51 percent. For a 1 year period the stock returns have been a negative 17 percent. However on a three year period the annualised returns for the stock has been 20 percent.  Whereas its peer company Maruti Suzuki is trading at a PE of 30.60. The YTD for Maruti Suzuki has been 26 percent. For 1 year period Maruti Suzuki has delivered 67 percent and for a 3 years period the stock has generated 55 percent returns.

Clearly Tata Motors has underperformed when compared to its peers like Eicher Motors and Maruti Suzuki.As per the ET reports the analysts consensus 12 month target is 578 for Tata Motors.

Tata Motors Limited is India’s largest automobile company, with consolidated revenues of INR 2,62,796 CRORES IN 2014-15. It is the leader in commercial vehicles in each segment, and amongst the top in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments.

Tata motors, also listed in the New York Stock Exchange has emerged as an international automobile company. Through its subsidiary and associate companies, Tata Motors has operations in the UK, South Korea, Thailand , South Africa and Indonesia. Among them is Jaguar Land Rover, acquired in 2008.Tata Motors is also expanding its international footprint, established through exports since 1961. The company’s commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia, South America, Australia, CIS and Russia. It has franchisee/joint venture assembly operations in Bangladesh, Ukraine, and Senegal.

Due to its global market presence and compelling valuations one can look at Tata Motors from the investment perspective for long term.