Tata Motors to beat projections if India business rebounds: Manish Sonthalia

In a chat with ET Now, Manish Sonthalia, Sr VP & Head-Equities PMS, Motilal Oswal Asset Management-PMS shares his view on Tata Motors. Excerpts:
ET Now: What is the trajectory for Tata Motors given that they have come out with excellent set of numbers. Do you think the natural state of trajectory for Tata Motors is that the stock wants to go higher?

Manish Sonthalia: Yes, I would logically think so, because margins have been at around 17.5% even if we were to normalise those margins closer to 15.5%-16% now.

The normal volume growth in JLR as well as Jaguar now will ensure that the stock actually moves higher. The fillip will come when the CV cycle turns in India because remember on a standalone basis they actually posted a loss in the India business. So CNG variants of Nano, Indica and Indigo in addition to the turning of the CV cycle and increased volumes on JLR coming primarily on account of China would be crucial for the prospects of the company.

There is a lot of talk about number of name plates in China being reduced or capped. That is having some negative impact on Tata Motors but we have seen these sort of rumours in the past as well. So volume continues to remain strong, margins are strong. Hopefully if India business turns around then Tata Motors should do much better than what normal projections are like.