IIFL has recommended a sell rating on Tata Motors with a price target of Rs 275 in its report dated August 14, 2009.
"Post our recent meeting with Tata Motors’s management, we reiterate our negative view on the stock. JLR volumes remain weak and there are no signs of revival in the near term. While volumes of other luxury brands are down 20% YoY YTD CY09 in Europe, JLR’s volumes are down 40% in the same period. The company is targeting cash breakeven in CY10. The company’s goal is to bring down employee costs by 20% and it also plans to increase JLR’s sourcing from low-cost countries (currently at 20%). JLR’s debt is likely to increase by a further GBP425m in this quarter."
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