Buy Tata Motors on declines: Rajesh Jain

Rajesh Jain, Market Strategist in an interview with ET Now talks about Tata Motors.

Your views on Tata Motors?

Great numbers. Expectedly the good news is from the international sales and profits, however, as an investor you are left wondering whether all the positives are already factored in and better sales for the next couple of quarters. Better global numbers for the next couple of quarters. Are they already in the price and in terms of shear risk reward ratio? Where would a fresh investment in Tata Motors at this point stand for an investor who does not own the share. I think for a greater margin of safety one would be happy buying it on declines.

Going forward a key question would be can Nano maintain the volume thrust given the fact that pricing has moved up a little for Nano and the competition from new entrants is making the value proposition of Nano a little dilute. The other issue is you have seen a few restages in the passenger car segment. Aria is being launched. Obviously it will be a lot of product launch cost but can the volumes and can the margin such a thrust so there will be certain pressures in this segment for Tata Motors but the commercial vehicle segment particularly the medium and heavy commercial vehicles the volumes have been doing well.

The new BS3 norms will make the products a little costlier so we have seen a bit of a dip in the October numbers and the LCV segment was affected due to capacity constraints particularly for raise. So some question marks popping up on the horizon and to that extent like I said new investment at this level seems to be a question mark but certainly a hold on the counter because good processes from the international business.