Tata Motors - DVR


(bbbhutra) #65

(bbbhutra) #66

I believe Tata Motors will remain under pressure due to weak JLR performance and wait time for the Indian business to turn around. The electric play will add up to the pressure overall. Though downside seems limited from current level, however I will wait a little more before adding up to current positions. Market seems weak and TM aint Mike Tyson. 270 level can be possible.


#67

JLR sales were pretty strong in April


(bbbhutra) #68

I was referring more towards stagnant sales in UK…Europe and US and also the path ahead due to electric vehicles. Hence developments needs to be tracked closely.


#69

Very encouraging for JLR …

Google seems to be have taken a lead for the driver-less car race and they have chosen i-Pace for initial fleet.


(Gary) #70

Over last 2 weeks or so, I have been studying Tata Motors and I feel there is a case for being bullish on the company. Here are my reasons for doing so , in no order of priority , that make me feel that Tata may be the comeback kid for 2018 / 19.

PS: The post is not meant to be introductory and I intend to focus on what’s changing.

JLR

  1. All reviews that I have seen of iPace seem good. The specs are significantly better than Tesla and price seems a tad lower. And it does look sexier compared to Model X. Tesla beater or not but there is a huge potential and even 25 - 30% market share shift from Model X towards iPace can be meaningful. Few links -


https://insideevs.com/jaguar-i-pace-outsells-tesla-model-x-in-france/

  1. E-Pace is absolutely new category for JLR and therefore net new . It has been a success and is likely to grow . With China production starting there are now 5 products that are local.
    http://www.chinadaily.com.cn/cndy/2018-04/26/content_36093275.htm
  2. Range Rover Velar has been selling quite well and seems to be well liked
    https://www.freep.com/story/money/cars/mark-phelan/2018/05/06/review-2018-land-rover-velar-suv/567386002/
  3. While UK continues to decline , the rest of Europe is going up. Of course, JLR would still be negatively impacted, but there is some solace. I don’t think UK pain is gone completely though.
    https://www.ft.com/content/f6e98bf4-5352-11e8-b3ee-41e0209208ec
  4. US sales has been breaking records for last 2 -3 months.

India - Passenger Vehicles

  1. Nexon has been quite a hit and has brought back some amount of confidence in Tata Motors. Still a LONG way to go though. With IPL season now on, I guess May could get further uplift
    https://auto.ndtv.com/news/tata-motors-passenger-vehicle-sales-grew-by-34-per-cent-in-april-2018-1845426
  2. H5X and 45X seem to be well received and can be path breaking launches later in the year . the Omega and Alpha platforms (whatever that may mean)

India - Commercial

  1. This has been the most heartening aspect when I see Jan to April numbers … 3x plus increase in M&HCV and nearly double in LCV and 4X in utilty. (Apr 2018)
    https://www.tatamotors.com/investors/volumes/

  2. When I compare the figures with Ashok Leyland, Bharat Benz, M&M and VECV, it does appear that Tata Motors is now gaining share .

  3. Overall INdustry will continue to grow for at least 12 - 18 months. given election year, lack of avenue to overload anymore and upcoming introduction of Bharat stage VI.

Risks -

  1. I think the biggest could be continuation of UK diesel issue followed by the impact of import taxes in US. JLR already announced 1000 jobs to be cut due to UK issue
  2. I am unsure how the China - US engagement will play out. If China reduces the duties on imported vehicle, the competitive advantage that C-JLR has could go down.
  3. In India particularly, I continue to be wary of Tata’s ability to execute on promise.

Disc: Had been a passive investor for last 2 years ; Recently started to build new positions.


#71

Tata Technologies disinvestment should also happen in near future.


(Gary) #72

The stock has gone down from 340 odd to to 295 with almost 12% decline while in same period couple of good news came .in. Eg alphabet has signed with JLR for their autonomous vehicle program and will buy 20000 JLR. And April numbers have been good including an unexpected growth in UK.

What MR MARKET knows that we don’t.???


#73

Not sure if something like this is true for bluechips. It has to do with uncertainties of international biz, US import duty, Britain diesel cess, Brexit etc.


#74

(Gary) #75

Well, none of these are last 30-45 day phenomenon. In fact as I mentioned above, UK actually had a sales increase rather unexpectedly last month.

There is something weighing down this stock… I just can’t pinpoint. :unamused:


#76

Well…I will not worry. I trust Tata’s management as one of the best. Chandra appears pretty confident and has not communicated anything which is worrying.


(gangtom) #77

#78

Results are okish considering 1600 cr of one time expenses…


(Gnana) #79

If true, negative for JLR.


(Gary) #80

Interesting read on how JLR is totally revamping the portfolio and entering new segments


#81

(Gary) #82

I don’t know if this helps JLR more or others like BMW. Through Chevy partnership they have a competitive advantage as 5 of their models are locally made. With reduced duty, they will lose that advantage … Manifested in price difference ( I guess)


#83

Not really, a lot of Chinese prefer imported model compared to same model which is locally manufactured. Now this will make JLR imported version attractive to them which are higher margin for JLR and 100% profit is in JLR kitty. So, this cannibalization helps JLR.


#84

First up: The I-Pace, a sleek crossover SUV from Tata Motors’ (NYSE: TTM) Jaguar luxury brand. The I-Pace is the first vehicle from a global automaker to roughly match Tesla’s range, specifications, and luxury level. It’s already in production for Europe, and it will arrive at U.S. Jaguar dealers later this year.