Tata Motors (DVR) a good long term bet, says Choksey

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Tata Motors (DVR) a good long term bet, says Choksey

Tata Motors (DVR) a good long term bet, says Deven Choksey, MD, KR Choksey.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Deven Choksey See what other Experts & Brokerages are saying about Tata Motors (D) See messages about Tata Motors (D)

Tata Motors (DVR) a good long term bet, says Deven Choksey, MD, KR Choksey.

Choksey told CNBC-TV18, "Tata Motors (DVR) offers an interesting investment opportunity for next 12-24 months. The first important advantage that one is having in this particular stock is that the DVR is quoting at a substantial discount of 50% to its current market price; it translates to the valuation of three times price to earnings ration on its FY13 earnings of expected earnings of around Rs 32 per share. So to a greater extent I think it offers a margin of safety and when the market improves in such situation the discounting gap between the main stock and the DVR is expected to come down to 30% from 50% so it naturally offers a margin of safety once again in this price."

He further added, "Apart from that the business condition Tata Motors probably is passing through relatively a better prospects at this point of time and falling interest rate scenario in coming quarters would augur well for the commercial vehicle segment in the domestic portfolio, the car segment too is registering steady volume in the domestic markets and most importantly in the Jaguar-Land Rover (JLR) portfolio of Tata Motors is registering a handsome amount of growth with new launches giving them a good amount of volume push even from the emerging markets which contributes about 40% of the business. So all in all put together I find Tata Motors' DVR an interesting investment opportunity for investors and probably would give almost 100% kind of return over two year period when they are held into the portfolio."

Disclosure: It is safe to assume that the stocks discussed have been recommended to clients.