In markets to real earn or beat the market estimates you have to use your own logic and find out some basics, when stocks like MRF, Eicher Motors, Page Industries started their journey nobody had predicted but good business give good returns. And for trading or investing purpose we have to enter the stock at cheap prices, otherwise everyday the share will go down.
We can see in the chart that stock had made high of Rs.695 in 1995 just imagine that era there was no ready information available like today at our fingertips. The number of cars which we see today are sold on loans, though it doesn’t matter to the manufacturer, we have many numerous problems like pollution, traffic, parking problems, etc. and mostly eminent people are seeing a downtrend in Auto Sector because they see Electric Cars as futures. So those companies who will adapt to such new Technology will run another 50–70 Years until something new comes to our market. From there stock made a low of Rs.28.55 in 2003, but people trust the brand which is attached that is “TATA”. But those who have little money or knowledge should remain away, we had given Sell on Tata Motors around Rs.360 from there you know where the share is know. Only sales or profitability doesn’t matter, Tata have acquired Land Rover & Jaguar, and due to Brexit issues it’s future may be affected so smart money is exiting from stock. Stock is not even giving signals of bottoming out. We are expecting Tata Motors to go to double digit. But before that stock has multiple supports technically around Rs.145 and Rs.125. But once Rs. 125 is broken we can also see levels around Rs.50–60. And this is nothing new you can search the life long history of this stock. But due to trust on the management and their hard work stock rises every time.
Cons:
Though the company is reporting repeated profits, it is not paying out dividend
Company has low interest coverage ratio.
The company has delivered a poor growth of 9.31% over past five years.
Company has a low return on equity of 12.81% for last 3 years.
Company might be capitalizing the interest cost
Dividend payout has been low at 0.20% of profits over last 3 years
Though balance sheet look good to normal eyes we clearly see problems in the Cash Flow Statement. One thing we should note that just by watching how many cars or trucks sold, but at the same time costs may have risen and it may be affecting the cash flow. They stopped Nano production but they have incurred the cost of manufacturing the plant, such things no Analyst on TV or your Financial Planner will tell because they are in the hope that they can sell this bunch of stock in the name of TATA, but one thing always keep in mind, in Stock Market never go behind the name. Even after 100 years General Motors was removed from the index of US Stock Markets, every company has its life cycle, there are many good stocks in market, just do some hard work, in market it is easy to lose money then to earn.
Edit: 05–03–2019
Since promoter group has come forward to buy around 154, the stock has found some support and we have a target around 230–256 when it starts trading above 201 with support. Sl is at 164 so one shouldn’t buy at high levels.
