Report for Tata Motors

Keep buying on Tata Motors with target price of Rs 780.Tata Motors (TML) has underperformed the broader markets (since July 2007, the stock price declined by 23%, against 4% returns generated by sensex) since the management announced the intention to acquire Jaguar and Land Rover (JLR). The recent right issue announcement by the management was much higher than the street expectations. As a result, the underperformance accelerated since April 2008.The stock price of TML declined by 15% against the decline in sensex by 1%. At Rs 541, the stock trades at 9.2 times its FY08 consolidated EPS of Rs 58.6