Tata Motors Ltd was incorporated on 1st September 1945 at Mumbai to manufacture diesel vehicles for commercial use, excavators, industrial shunter, dumpers, heavy forgings and machine tools. Company initially manufactured steam locomotives and progressively widened its product range to cover heavy commercial vehicles and light commercial vehicles. In the starting, Company formed a Collaboration with M/s Daimler -Benz AG, W. Germany, to manufacture medium commercial vehicles at Jamshedpur. Company formed a collaboration with M/s Hitachi Construction Machinery Co. Ltd., Japan, for manufacture of hydraulic excavators. In its small car segment has launched "Tata Indica" which evoked an overwhelming response in the Indian market. In 2000, Company launched the Indica 2000, the Euro II Complaint (75 BHP multi-point fuel injection) version of Indica. Company launched indica V2 version of its previous indica after some modifications. After this launch Indica considered top selling B-segment car in 2002.

Company has a manufacturing & supply agreement with MG Rover Group of the UK. Year 2003 was the remarking year for the company as it turnaround and posted profit of Rs 300.11 crore as against the loss of Rs 53.73 crore the previous corresponding period. Company name changed from Tata Engineering & Locomotive Company Ltd. (Telco) to Tata Motors Ltd. (TML) with effect from July 29, 2003. Along with this, company's reputed brand "Tata safari" got No 1 Rank in MUV/SUV segment. Tata Motors is the first Indian company from engineering sector to be listed in the New York Stock Exchange. In 2004, it acquired the Daewoo Commercial Vehicles Company, Korea's second largest truck maker. Company's commercial and passenger vehicles are being marketed in several countries in Europe, Africa, the Middle East, Australia, South East Asia and South Asia. It has assembly operations in Malaysia, Kenya, Bangladesh, Spain, Ukraine, Russia and Senegal.

Products & Services:

Tata Motors Limited is India's largest automobile company. It is the leader in commercial vehicles in each segment, and the second largest in the passenger vehicles market with compact, mid size car and utility vehicle segments. Company is the world's fifth largest medium and heavy commercial vehicle manufacturer. Company manufactures Passenger Cars, Utility Vehicles, Buses, Trucks & Defense Vehicles. In the passenger car segment, company manufactures & supply Indica V2, Indigo, Indica V2 Xeta, Indica V2 Turbo, Indigo Marina, Indigo SX, Indigo Manza & Fiat. In the utility vehicle segment it has a portfolio of Safari Dicor & Tata Sumo. In Trucks it has Medium and Heavy commercial vehicles like heavy duty loading trucks, Car carriers, Oil & Gas Tankers, Intercoolers for construction, and Tippers for the purpose of material handling and transportation and Heavy Duty Tractor Trailers for various industrial and others purposes. In buses company has Globus and Starbus range. Tata Globus Coach has been designed to transport long-distance traveller in the very lap of luxury. From the ergonomically designed seats, spacious legroom, special baggage space, and personalized climate control vents to quieter engines, air-suspension and superior braking systems. Tata Starbus is available in a comprehensive range of variants, with seating capacities from 16 to 67 seats. This is designed on the concept of optimum functionality and comfort with economy. Except this, Company is also manufacturing Defence vehicles like Heavy duty trucks for Troops and cargo loading.

Company's manufacturing base is spread across Jamshedpur, Pune and Lucknow, supported by a nation-wide dealership, sales, services and spare parts network of 1,200 centers. Through its subsidiaries, company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. Company has set up a Research and Development Center at Jamshedpur for this purpose.

Recent development:

Tata Motors planning to produce around 40,000 Nanos this fiscal though numbers will increase four-fold to over 1.7 lakh units during 2010-11. The new plant at Sanand in Gujarat would start rolling out small numbers of the Nano in February 2010. This is expected to go up to
1,200 units in March.

In October, company has launched its new generation sedan, the Tata Indigo Manza. Built on its new car platform, the Indigo Manza succeeds the highly successful Tata Indigo, which became a best-seller in the very first year of its launch in 2003 and has since then sold close to
3,00,000 nos of the range. The Indigo Manza is an altogether new car. A complete new body on a new platform houses an all new interior and makes a bold styling statement. With a length of over
4.4m, a width of 1.7m, and a wheel base of 2,520mm, the sedan has grown in size and thus in interior space.

Tata Motors has begun distribution of its Prima range of World Trucks, which was unveiled in May this year. The first product, the Prima 4028 S, is a 40-ton 266-PS (Cummins ISBE engine) tractor with a 9-speed ZF transmission, and a matching trailer with new generation brakes, ABS and specialized axles for heavy duty and high speed application. The Prima 4028 S tractor has been priced at Rs 21 lakhs (ex-showroom Delhi), and that with the trailer is Rs 31 Tata Motors total sales (including exports) of Tata commercial and passenger vehicles in October 2009 were 53,404 vehicles, a growth of 34% over 39,729 vehicles sold in October 2008. The company's domestic sales of Tata commercial and passenger vehicles for October 2009 were 50,552 nos., a 40% growth over 36,168 nos. sold in October last year.

Valuation:

At current market price, stock is trading at 12.6 P/E multiple of its FY2010 estimated earnings. We recommend investors to "BUY" "Tata Motors Ltd" with medium to long-term investment horizon.