InvestorQ : I bought Tata Motors around the price of Rs.200 when it was correcting. The stock has now come close to that level. Should I sell out or hold on?
Priyanka N made post

I bought Tata Motors around the price of Rs.200 when it was correcting. The stock has now come close to that level. Should I sell out or hold on?

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NISHA Nayak answered.
2 years ago
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If you look at the profits of Tata Motors for the March quarter, then the profits were lower by almost half but it was still better than what the market expected and that is what matters to price performance. Tata Motors’ JLR unit has performed well after 3 quarters of underperformance. JLR remains the largest part of Tata Motors in terms of total revenues. Net profits for the March quarter were down by 49% at Rs.1109 crore while net sales were down by 4% at Rs.86,422 crore. Of course the challenge of 1.2% net margin will continued to weigh on the stock price as it is hard to sustain valuations at such low NPMs. The Tata Motors group has embarked on a massive cost reduction exercise and that has saved JLR close to GBP1.2 billion during the quarter.

The good news for Tata Motors may be coming from the US and UK. In the last 3 quarters, the stock price of Tata Motors was falling because the Chinese market, the major market for JLR, was slowing. That is now being compensated from higher demand in the US and UK. The Tata group itself may be undergoing a major restructuring of businesses and in the medium term Tata Motors plans to have a much bigger focus on electric and environment friendly cars. While NPMs could be an issue for the company, the stock looks reasonably valued at current prices and you can hold on for the medium to long term.

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