Tata Motors dispatches for the month of January 2010 were better than our estimates due to strong performance of the passenger car division. However, sales mix was poor due to higher proportion coming from low profit cars division. MHCV segment grew by 10% to 16.5K units while LCV sales were up by 17% to 24k units.

Passenger cars sales were up by 13% to 26k units with `Nano' sales growing by 68% to 6,703 units. Indigo dispatches were higher by 17% at 8,456 units. Indica dispatches improved significantly on a sequential basis to 10,591 units.

We have a positive outlook on the stock in the medium term. However, we believe that in the near term, we may see pressure on the stock due to over optimism regarding JLR profitability.

We do not have a rating on the stock.