Táta Mótors Ltd. Is the largest Indian carmaker, a member of the Tata Group, was previously known as TELCO. Since 2006, among the top 20 automakers. The company manufactures cars of different levels, from cheap Indian brands to global brands, as well as vehicles for various fields of activity, from trucks to military vehicles. Shares of Táta Mótors Ltd. (TTM) are traded on the New York Stock Exchange (NYSE).
In its annual report, Tata Motors reported an increase in domestic sales in 2018 by 16% compared with last year. The revenue of the entire concern, in turn, added 9.28% for the year. The company’s net income for 2018 increased by more than 20% despite the fact that the Jaguar Land Rover Group (JLR) acquired in 2008 generated losses for more than 4 billion US dollars in 9 months of 2018.
What is happening in the automotive market?
The company’s sales in 2018 decreased by 4.6% compared with 2017, especially in the markets of China (21.6%) and Europe (-7.8%). The main reason was the “trade war”, aggravated in mid-2018.
The drop in sales of diesel cars in Europe was primarily caused by the scandal with Volkswagen (FRA:VOW3), which certainly hit the sales of Land Rover SUVs. However, from the end of 2018 the beginning of 2019, the vast majority of cars produced will be equipped with hybrid installations. In addition, in support of TATA Motors is a new electric car Jaguar I-Pace, recognized as a 2018 car in Europe. I-Pace should make a serious competition for cars Tesla.
The potential increase in sales of JLR cars, in view of the above facts, should ultimately have a positive effect on the capitalization of the Tata Motors group.
Technical analysis of stocks
The general trend for TATA shares has been in the global downtrend channel since the beginning of 2015.
This channel is quite clear with pronounced boundaries. Judging by the structure of the movement, an asset very often works out reversal patterns.
At the moment, on more detailed timeframes a clearly defined pattern of “double bottom” has formed, which tells us about the local reversal of the trend. When working out the entire height of the figure, the first goal is the level of $ 17 per share. With further conservation of momentum, the target mark is a level of $ 20. Further movement will be possible only with the preservation of favorable fundamental factors.
Conclusion. We recommend treating the purchase of TATA shares as a medium-term investment idea.
The risk of such an operation is moderate. The company is now very stable and has prospects for capitalization growth.