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Tata Motors: On a roll


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by Yiannis Mostrous, editor Global Investment Strategist

India’s Tata Motors (TTM) has been delivering on all cylinders. In the most recent quarterly numbers the company showed an increase in profit of 136 percent year-over-year, for a 44 percent increase in net sales.

The company’s new state-of-the-art Dharwad plant for small commercial vehicles, in the southwest state of Karnataka, is now operational and has begun to produce the Tata ACE Zip and the Tata Magic IRIS.

The company already dominates India’s commercial vehicle market and the new factory will allow it to further cement this advantage.

The company has also entered the Myanmar market through an agreement with Apex Greatest Industrial Co Ltd. The agreement is for the distribution of Tata Motors’ commercial vehicles and passenger cars in Myanmar, which is gradually democratizing and opening up to investors.

Tata Motors is poised to surprise on the upside this year, as the company’s Jaguar Land Rover (JLR) unit continues to perform well in China, one of the highest margin car markets in the world.

Earnings growth is on track for 20 percent this year, while margins should reach about 14 percent. The JLR unit should be the stellar performer again this year, with margins above 15 percent. Tata Motors is on a roll and the stock remains a buy up to $25.

Learn more about this financial newsletter at Yiannis Mostrous' Global Investment Strategist.

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