Tata Motors may correct another 5-7%; stock a long-term opportunity: Neeraj Dewan

In a chat with ET Now, Neeraj Deewan, Director, Quantum Securities, talks about Tata Motors.

ET Now: Tata Motors stocks are available at PE of 7 or 8 PE. It is a large company, it has got global brands. Even as its brands are not as big as BMW or Mercedes and Jaguar is probably a fraction of those, but there is ample room to grow. In addition, if the CV cycle turns around, it would aid the domestic business of Tata Motors as well. Is the stock pricing in too many negatives or the prevailing levels the more apt levels for Tata Motors to be at?

Neeraj Deewan: Tata Motors stock has been factoring in some sort of a slowdown from China business. The cut in sales forecast that the company has announced today is also reflecting that. Market normally factors in things much faster than, they happen on the ground.
I believe most of the negatives are getting priced into Tata Motors stock.

China concern has have almost got priced in. There can be a further 5-7 per cent downside from these levels, but these are the opportunities which one can look into. Tata Motors will be now launching Jaguar’s entry level vehicles in Asian markets. Besides, the domestic economy doing well and may be the CV segment, where Tata Motors enjoys 60 per cent market , may also start doing well. So, if one had a longer-term perspective, these are opportunities.

But definitely one needs to see whether the stock is making a base because if you see the stock continuously falling another 5-7 per cent, then you can really wait for the stock to make a base. Tata Motors is an opportunity for long-term investors.