 "Tata Motors: US, India sales boost prospects")
Strong sales for JLR (Jaguar Land Rover) in the US as well as higher commercial vehicle sales in India in February helped the Tata Motors stock gain over six per cent in trade on Thursday. The gains came despite the profit warning issued by JLR's chief executive recently. JLR's pre-tax profits are expected to come in lower than a year ago, given the slowdown in China, higher R&D (research and development) expenditure, promotional costs, and a high base last year.
For light commercial vehicles, this is the third month of sales growth. But year to date, sales are down 13.5 per cent. Sales of its passenger and utility vehicles continue to disappoint. Sales of its cars fell 20.5 per cent, while those of utility vehicles were down 13 per cent. The launch of the Tiago hatchback is expected to offer some relief to the passenger vehicle sales of the company.
While China has been disappointing, sales for JLR in the US continue to be robust. Led by Land Rover, sales were up 25 per cent year-on-year for February. While Land Rover's sales were up 31 per cent, Jaguar's sales were higher by seven per cent. This is creditable, given that the total premium car sales in the sector were flat year-on-year.
The Street will also be enthused about the stock as the Budget proposals are expected to push demand for medium and heavy commercial vehicles. The measures include a 50 per cent rise in allocation towards road construction, which should improve demand for construction trucks. The increase in defence spending for medium and heavy commercial vehicles by 75 per cent should also help Tata Motors. Further, the participation of the private sector in the road transport segment after the scrapping of the permit system as well as higher spending for Atal Mission for Rejuvenation and Urban Transformation are positives.
For light commercial vehicles, this is the third month of sales growth. But year to date, sales are down 13.5 per cent. Sales of its passenger and utility vehicles continue to disappoint. Sales of its cars fell 20.5 per cent, while those of utility vehicles were down 13 per cent. The launch of the Tiago hatchback is expected to offer some relief to the passenger vehicle sales of the company.
While China has been disappointing, sales for JLR in the US continue to be robust. Led by Land Rover, sales were up 25 per cent year-on-year for February. While Land Rover's sales were up 31 per cent, Jaguar's sales were higher by seven per cent. This is creditable, given that the total premium car sales in the sector were flat year-on-year.
The Street will also be enthused about the stock as the Budget proposals are expected to push demand for medium and heavy commercial vehicles. The measures include a 50 per cent rise in allocation towards road construction, which should improve demand for construction trucks. The increase in defence spending for medium and heavy commercial vehicles by 75 per cent should also help Tata Motors. Further, the participation of the private sector in the road transport segment after the scrapping of the permit system as well as higher spending for Atal Mission for Rejuvenation and Urban Transformation are positives.