Strong Buy for Tata Motors

Strong performance by Tata Motors is indicated by the fact that Tata Motors has paid the advance tax of 220 Cr for the quarter ending Dec'10 against 100 Cr for the corresponding quarter last year.

The consolidated net profit for the Half Year ended Sep'10 for the Tata Motors was Rs.4,212 crores as compared to loss of Rs. 307 crores in the first half last year. Consolidated EPS for first half of FY11 stood at 73.76 Rs against 5.97 Rs last year. This makes Tata Motor looks extremely cheap with the forward PE of approximately 10.

The global sales of Tata Motors is going up. Jaguar and Land Rover sales rose 22% to 22,957 units in November 2010 over November 2009. Jaguar sales for the month were 5,621 units, up by 30%, while Land Rover sales were 17,336 units, higher by 20%. As both of them add great value to the profitability of the Tata Motors, it is a huge plus point.

Another good news on the counter is that Tata Motors is going to increase the prices of the vehicles in January'11.

Excellent Listing for MOIL but not enough returns for retail investors

As anticipated by millions of Indians and almost all the analyst, MOIL has given a very good listing gain. It has listed at 551 and traded above 500 most part of the day, but closed at 466.5 in NSE. It has reached the intraday high of 591.

The only problem with the MOIL was, even though the retail investors have subscribed for one full application (2 Lakh i.e., 31 lots) most of them are allotted with only 1 lot (17 shares). So even if retail investors have booked profit at 530 Rs, they have gained only around 175 Rs. With only 17 shares allotted, the overall profit is 17*175 is approximately 3000 Rs. With the investment of 2,00,000, profit of 3,000 doesn't sounds impressive.

Hence my conclusion about the allotment and listing gains of MOIL is not impressive.

Current Status of the Invesment opportunity mentioned below

 

Current Status of the above mentioned investment.

The overall gain of the investment would have been 1.54% (assuming equal amount would have been invested in each of the above mentioned shares) versus the nifty gain of 3.65% (Not great haa... Lets see what happens in future)