Tata Motors, which alone accounts for nearly 65 percent of the heavy-duty truck market in India - a segment that has fallen over 25% this year, is now looking at newer overseas markets and expects international sales to grow three-times to 150,000-160,000 units a year by FY17.
After two straight years of steep decline in sale of commercial vehicles, the country's largest truck maker Tata Motors is now devising a de-risking strategy, which will see the company enter new markets and increase its overseas business.
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Armed with a new range of trucks and a weaker rupee, the company is looking to enter a slew of new markets and increase its overseas business three times in as many years.
With the heavy duty truck segment tanking by a fifth this fiscal, the patience of Indian commercial vehicle makers is running out.
Tata Motors, which alone accounts for nearly 65 percent of the heavy-duty truck market in India - a segment that has fallen over 25 percent this year, is now looking at newer overseas markets and expects international sales to grow three-times to 150,000-160,000 units a year by FY17.
As per the strategy under works, the company will use its subsidiaries and associate firms in Thailand, Indonesia and South Africa to gain a larger presence overseas apart from increasing its share of volumes in Vietnam, Cambodia and the Philippines.
Ravi Pisharody, executive director, Tata Motors says, " In the last three to four months, we have seen a sharp uptick in exports. I think in February we had our best export numbers over the last 2-3 yrs. March is likely to be even better. The exchange rate situation is also helping to price it.
Sources say last year Tata Motors started assembling trucks in South Africa giving them access to other African markets as well. Tata Motors' latest range of Prima trucks will also make their way to newer markets of Middle East and Australia where they have already launched the Xenon pick-up vehicle.
Company officials say while Tata Motors' prime focus will continue to be the domestic market, it wants to de-risk by looking overseas for sales and higher margins.
Next fiscal the company intends investing upto Rs 1500 crore in product development next fiscal apart from launching a slew of new products.
Tata Motors stock price
On March 11, 2014, Tata Motors closed at Rs 398.10, up Rs 2.20, or 0.56 percent. The 52-week high of the share was Rs 420.30 and the 52-week low was Rs 252.10.
The company's trailing 12-month (TTM) EPS was at Rs 2.61 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 152.53. The latest book value of the company is Rs 59.47 per share. At current value, the price-to-book value of the company is 6.69.
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