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Tata Motors Falls Due to Low Vehicle Sales in December 2015

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Tata Motors’ price movement

Tata Motors (TTM) has a market cap of $17.0 billion. It fell by 6.1% to close at $25.27 per share on January 7, 2016, and its price movement on a weekly, monthly, and YTD (year-to-date) basis is -14.1%, -13.7%, and -14.3%, respectively.

Technically, the stock has broken support and is trading below all moving averages. Currently, Tata Motors is trading 11.6% below its 20-day moving average, 14.5% below its 50-day moving average, and 22.0% below its 200-day moving average.

The First Trust ISE Chindia ETF (FNI) invests 3.6% of its holdings in Tata Motors. The ETF tracks an index of stocks from China and India, screened by market cap and weighted in tiers. The YTD price movement of FNI is -5.2% as of January 6, 2016.

Tata Motors’ competitors and their market caps are as follows:

  • Toyota Motor (TM) – $194.9 billion
  • Ford Motor Company (F) – $50.4 billion
  • General Motors (GM) – $46.7 billion
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Tata Motors’ commercial vehicle sales for December 2015

  • Medium and heavy commercial vehicle sales rose to 12,673 units in December 2015, a rise of 2% from December 2014.
  • Light and small commercial vehicle sales rose to 14,674 units in December 2015, a rise of 11% from December 2014.
  • Cumulative sales of commercial vehicles in the domestic market for the fiscal year fell to 227,655 units, a fall of 3% from last year.

Tata Motors’ passenger vehicle sales for December 2015

  • Passenger vehicle sales fell to 8,069 units in December 2015, a fall of 33% from December 2014.
  • Wholesale passenger car sales fell to 6,900 units in December 2015, a fall of 31% from December 2014.
  • Utility vehicle sales fell to 1,169 units in December 2015, a fall of 44% from December 2014.
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Exports

  • Sales from exports rose to 4,557 units in December 2015, a rise of 15% from December 2014.

Tata Motors’ performance in fiscal 2Q16

Tata Motors (TTM) reported a fiscal 2Q16 net income of 61,318.2 crore Indian rupees, a rise of 1.1% from the net income of 60,640.8 crore rupees in fiscal 2Q15. Its net income and EPS (earnings per share) fell to -411.1 crore rupees and  -1.27 rupees, respectively, in fiscal 2Q16, from a net income and EPS of 3,306.8 crore rupees and 10.10 rupees, respectively, in fiscal 2Q15.

Meanwhile, its cash and bank balances fell by 16.5% and inventories rose by 23.5% between fiscal 2Q16 and fiscal 4Q15. Its debt-to-equity ratio fell to 2.2 in fiscal 2Q16 from a debt-to-equity ratio of 3.2 in fiscal 4Q15.

The PE (price-to-earnings) and PBV (price-to-book value) ratios of Tata Motors are 5.8x and 1.3x, respectively, as of January 7, 2016.

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