Tata Motors (TTM) & Its Rivals Critical Analysis

Tata Motors (NYSE: TTM) is one of 30 publicly-traded companies in the “Motor vehicles & car bodies” industry, but how does it compare to its competitors? We will compare Tata Motors to related businesses based on the strength of its earnings, risk, analyst recommendations, profitability, dividends, institutional ownership and valuation.

Profitability

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This table compares Tata Motors and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tata Motors 3.92% 19.58% 4.69%
Tata Motors Competitors -14.13% -0.28% -3.83%

Volatility and Risk

Tata Motors has a beta of 2.25, suggesting that its stock price is 125% more volatile than the S&P 500. Comparatively, Tata Motors’ competitors have a beta of 1.00, suggesting that their average stock price is 0% more volatile than the S&P 500.

Earnings and Valuation

This table compares Tata Motors and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Tata Motors $41.04 billion $943.80 million 19.59
Tata Motors Competitors $62.83 billion $2.64 billion 16.04

Tata Motors’ competitors have higher revenue and earnings than Tata Motors. Tata Motors is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings for Tata Motors and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tata Motors 0 2 2 0 2.50
Tata Motors Competitors 439 1265 1629 110 2.41

Tata Motors presently has a consensus target price of $30.00, indicating a potential upside of 9.41%. As a group, “Motor vehicles & car bodies” companies have a potential upside of 9.93%. Given Tata Motors’ competitors higher probable upside, analysts plainly believe Tata Motors has less favorable growth aspects than its competitors.

Insider and Institutional Ownership

65.7% of shares of all “Motor vehicles & car bodies” companies are owned by institutional investors. 8.1% of shares of all “Motor vehicles & car bodies” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Tata Motors beats its competitors on 7 of the 13 factors compared.

About Tata Motors

Tata Motors Limited designs, manufactures, and sells a range of automotive vehicles. It operates through Automotive Operations and All Other Operations segments. The company offers passenger cars, such as passenger cars; utility vehicles, including SUVs and multipurpose utility vehicles; light commercial vehicles comprising pickup trucks and small commercial vehicles; and medium and heavy commercial vehicles consisting of trucks, tractors, buses, tippers, multi-axle vehicles, dump trucks, tractor-trailers, mixers, and cargo vehicles, as well as related parts and accessories. It also manufactures engines for industrial and marine applications; aggregates, such as axles and transmissions for commercial vehicles; and factory automation equipment. The company is also involved in the provision of 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. In addition, it provides engineering and design services, product lifecycle management, and product-centric information technology services, as well as vehicle finance and insurance brokerage services. The company markets its products under the Nano, Indica, Tiago, Indigo, Tigor, Sumo, Sumo Grande, Safari, Safari Storme, Hexa, Aria, Zest, Bolt, and Venture brand names; alternative fuel vehicles under the Nano and Indigo brands; and premium performance cars under the Jaguar Land Rover brand name. Tata Motors Limited operates in India, China, the United Kingdom, the United States, rest of Europe, and internationally. The company was formerly known as Tata Engineering and Locomotive Company Limited and changed its name to Tata Motors Limited in July 2003. Tata Motors Limited was founded in 1945 and is based in Mumbai, India.

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