India Watch : Merrill Lynch say Tata Motors likely to remain on growth path

Carole Nash Classic Insurance Specialists

The Hindu, 22nd June, 2009

Tata Motors is likely to remain on its growth path as the strength of its domestic operations would more than offset the weaknesses at Jaguar Land Rover, which itself could see a recovery in sales by next year, brokerage firm Merrill Lynch said on Monday.

Tata Motors will see “strong operational recovery of its domestic business, which we believe should be the prime driver of stock valuations,” Merrill Lynch said in a research report, adding that “Jaguar Land Rover is likely to recover next year.”

Tata Motors is scheduled to disclose its financials next week and is currently negotiating with the British government to arrange long-term funds for the sustenance of JLR.

Despite the fact that volumes are likely to remain muted in developed markets such as the US and Europe, Merrill Lynch said that Tata Motors’ consolidated business (standalone and domestic subsidiaries as well as JLR) is likely to register growth in net sales and earnings before interest, taxation, depreciation and amortisation.

Tata Motors’ growth would be mainly driven by higher commercial vehicle sales, mainly trucks and buses, and lower commodity prices, because of which the company can achieve lower costs and can get higher realisation, the report said.

[Source: The Hindu]

Clive Goldthorp

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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