Tata Motors

Alchemist

Administrator
Staff member
#41
Alchemist, what are the chances that the entire Tata group is rerated downwards? For example, one route of raising the money could be selling off stock held by Tata Capital or Tata Investments?
I don't see any of the effects getting passed on to the other companies in the group.

Tata Group is a very large group and is in a position to easily absorb the losses.

The recent Tata-Docomo deal has valued the unlisted Tata Teleservices at around Rs 50000 crore.

Tata Groups also has other big companies like

TCS: market value = Rs 52000 crore.
Tata Power: market value = Rs 16500 crore.
Tata Communications: market value = Rs 14000 crore.

If need arises, "Tata Sons" has a lot that it can sell to raise cash. It may sell small chunks of many of its companies and raise the cash.

Besides that, Tata Motors also has a holdings in its subsidiaries and other companies. Some of these may be put on the block to raise extra cash.

====================================

Investors should wait till April 2009 and see how much damage the pension liabilities do to the company.
 

vasa1

Well-known member
#42
Today's Economic Times has Tata Motors fails to pay vendors, suppliers on the front page.

The article quotes several vendors and suppliers claiming unpaid dues totalling more than 1,200 crores.

The article has no specific response from Tata Motors.

This news doesn't figure in DNA Money or the Business Standard.....
 

paran

Active member
#44
Company's fundamental outlook

Source: BS
It will be 4-6 quarters before the global economic outlook improves to levels that would help JLR achieve break-even sales, say analysts. To its advantage, the domestic business is doing better and the anticipated revival could provide a cushion to the consolidated performance. Additionally, lower raw material prices should also add to margins. And, gains from cost-cutting measures and better cash flows, undertaken by JLR should help hasten its recovery. Analysts expect the company to report a significantly lower consolidated loss (estimates range Rs 600-900 crore) in 2009-10.

Nonetheless, in light of the combined product development expenses and capital expenditure they expect cash flows to be muted. Hence, given that Tata Motors has debt repayment obligations of Rs 8,150 crore over next 21 months (Rs 1,800 crore in 2009-10; total adjusted debt-equity of over 4:1 currently), it may need to go in for a significant equity dilution, apart from divestment of investments. In this background, at Rs 300, the stocktrades at an expensive valuation of 28 times its estimated standalone EPS for 2009-10.
 
#45
Tata Motors car sales have been miserable in the last 5-6 months. They were usually #2 or #3 in car sales earlier. Now they are #5.

Inspite of this, their stock is still priced near it's 5 year high. What gives?
 

magnet

Active member
#46
Tata Motors car sales have been miserable in the last 5-6 months. They were usually #2 or #3 in car sales earlier. Now they are #5.

Inspite of this, their stock is still priced near it's 5 year high. What gives?
One reason..

JLR

Its sales figure in CHINA is helping it to show profit in its sales.

Also the way they are launching new JLR versions it keeps the anticipation high.

Now come to INDIA.Even a basic car NANO was said a new version with open back dicky would be available. It's been 4 years and no job done. Same goes with other cars. Just refreshing VISTA won't help.

See Suzuki Maruti or Honda, even after having brio they went for amaze. Also new jazz and honda city due next year. For maruti one saw ERTIGA,RITZ and A STAR.

Though not hit but they are trying new products, See AUTO had one of the worst quarters in last 10 years. Still HONDA, Renault were able to push their new product AMAZE and DUSTER.

Just refining old models won't work in INDIA.

I know TATA's Manza is an amazing product. But they need to relaunch a new model or create one for sales figure to improve.

For Nano I feel a premium line must be added like power steering and say air bags and all. It has good space inside. It's just that people don't feel safe when they drive it. But will surely buy premium product and I guess CNG and Diesel model will be a hit.
 
#47
Now come to INDIA.Even a basic car NANO was said a new version with open back dicky would be available.Its been 4 years and no job done.Same goes with other cars.Just refreshing VISTA wont help.

See Suzuki Maruti or Honda,even after having brio they went for amaze .
Because Honda's sales were pathetic for almost 5-6 months. It's picked up again only in the last couple of months.
Just refining old models wont work in INDIA.
It's not cheap to create new models. For other companies, it's easier because they sell all over the world. Most other companies have hardly 1 or 2 models which have been specifically made for India. Tata doesn't have these kind of economies of scale.


For Nano i feel a premium line must be added like power steering and say air bags and all.It has good space inside.Its just that people doesnt feel safe when one drives it.But will surely buy premium product and i guess CNG and Diesel model will be a hit.
In my opinion, Nano is one of the reasons for Tata Motors downfall.

Ratan Tata assumed Nano would sell itself and in huge volumes (minimum 25K+ per month) without spending much on advertising and marketing. And Tata Motors priced the Nano based on these assumptions. But sales were pathetically poor - at the lowest point was probably around 1K-2K per month. Hence the economies of scale they assumed didn't happen & hence cost of manufacturing was more than they expected. Not just that, it was the CEO's pet project. Hence they couldn't let the project fail. TM concentrated more on Nano than other cars - not just that they spent huge amounts of money on marketing and advertising and cheap loans to hike up the sales to satisfy the CEO. This helped Nano gain a bit of sales (10K per month). However this kind of continuous spending wasn't possible and once Ratan Tata was no longer in charge - the spending & attention seems to have been reduced and hence Nano is back to pathetic sales now. IMHO, this would have been done long back if not for Ratan Tata & would have helped Tata Motors.
 

Alchemist

Administrator
Staff member
#48
Tata doesn't have these kind of economies of scale.
The problem is not about money, but about attitude.

Japanese and Korean companies didn't become global companies overnight.

They became global companies because they aimed to be world-class companies.

It took a lot of hard work for the Japanese companies to make a place in the western markets. They were determined to make better products than anyone else in the world and that's the reason why they are at the top today. That determination is missing in Indian companies.

Indian companies have set the bar too low. They are contend with making second-rate automobiles with third-rate engines. That is why they have no sales in the developed economies.

Tata Motors spent billions to acquire JLR.

Wasn't that money enough to develop a world-class car?

It was, but Tata Motors was too lazy to develop such a product and preferred to buy JLR's technology at a ridiculous price.

I feel within a decade or two, JLR will be brought down to Indian standards. Like all other Indian companies, it will fail to innovate and fade into oblivion.

Tata Motors has never developed a good petrol engine. The company has a good share in the diesel car market, but that too is getting eroded as other companies have now introduced diesel engines.

The overall sales figures for Tata Motors don't look that bad because most of the company's standalone revenues come from commercial vehicles and not from cars.
 
#49
I agree with almost everything you say - hence snipped most stuff out.

Tata Motors spent billions to acquire JLR.

Wasn't that money enough to develop a world-class car?

It was, but Tata Motors was too lazy to develop such a product and preferred to buy JLR's technology at a ridiculous price.
Agree with this also. It's the age old debate of organic growth vs growth by buying companies. Graham's opinion for stock selection is that you should avoid companies who are serial acquirers - the logic being - if the company themselves think it's better to invest their money on outside companies rather than internally, then why should you invest your money on the company. I fully agree with Graham's view.

Tata Group of companies were serial acquirers under Ratan Tata. Not just that, they overpaid for a lot of stuff in my opinion. Yeah, it made Indian's chests well with pride, but I avoid Tata stock mostly because of these reasons.
 
#51
Sell 50 shares at the current price and wait for a correction to buy again. As long as it keeps outperforming the Nifty, hold the remaining 50 shares.
 

magnet

Active member
#53
I hold 10 dvr shares at 99 price I guess.No plan to sell it soon.

Might add more.

I only have hope on their overseas numbers.
I have Tata Nano car.And the way their A.S.S goes.And in 4 years suffering one brake fail and one accelerator cable fail and paying 7k for just basic changes and fumigation in car.

I guess I wont buy any tata motors product ever in my life.

Also heard the commercial people are also not happy with its product especially cab owners.

Heard its new vista tech has hit market which can seriously dent Swift as it targets it only. Also I had love on Manza when it launched.

Note(Not important to red if investing in share bur important if buying a tata motors product)::But ultimately its the A.S.S(After sales service)where it suffers badly.Neither they are ready to pick your car from your place,neither on delivery they are ready with a wash and wastes good 3 hours in some time pass or other,also they broke my mirror case and it has is own long story.And yes I forgot they kept the car for 20 days plus just for sake of replacing the battery which conked because of some safety adjustment done in car within a week of doing it.
 
#55
Any thoughts on the long term future of Tata Motors? The stock has been battered badly, and rightly so, due to the continuous bad results by the company in recent quarters. The JLR losses refuse to die down, and the general slowdown in domestic sales across the industry is also hurting.

But from a long term perspective, Turnaround 2.0 may reap benefits, especially in the domestic markets, and there are plans to make JLR profitable again.

From a long term perspective, what is the outlook of members of this forum on this stock?
 

Alchemist

Administrator
Staff member
#56
Any thoughts on the long term future of Tata Motors? The stock has been battered badly, and rightly so, due to the continuous bad results by the company in recent quarters. The JLR losses refuse to die down, and the general slowdown in domestic sales across the industry is also hurting.

But from a long term perspective, Turnaround 2.0 may reap benefits, especially in the domestic markets, and there are plans to make JLR profitable again.

From a long term perspective, what is the outlook of members of this forum on this stock?
If the company had reported losses in a down-cycle, then I may have suggested buying this stock.

The problem is that both Indian and global economies are showing signs of exhaustion after a long liquidity-driven expansionary phase.

An economic contraction seems inevitable in the west and the Indian economy is also losing momentum - with both investment and consumption showing signs of trouble.

I feel is it is too early to hope for turnarounds in the economy. Next 12-18 months may be much worse than the last 12-18 months.
 
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