Tata Engg. set to looker leaner ... and meaner - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Tata Engg. set to looker leaner ... and meaner

Feb 25, 2000

Tata Engineering plans to transfer some of its components to separate subsidiaries to ensure more focus in its core operations. Tata Engineering is India's largest medium/heavy commercial vehicles (M/HCV) (65% market share in September 1999) and light commercial vehicles (LCV) (63% market share) manufacturer. It also manufactures utility vehicles (28% market share) and passenger cars (8% market share).

According to reports in a leading business daily, Tata Engineering's board has approved a proposal to transfer the company's heavy-duty transmission axles and machine tool divisions into three separate subsidiaries by way of a 'slump sale'.

The decision to transfer the components into distinct subsidiaries was taken last year itself. This marks a change in the company's policy highlighting a departure from non-core areas to greater focus on its core business, viz. manufacture, design, assembly and marketing of vehicles.

The company has identified leading global manufacturers for tie-ups in the three component subsidiaries. According to the news report, the company is in discussions with Eaton Corp. of USA and ZF of Germany for transmission and clutches. It is also keen on a tie-up with Meritor of Rockwell for its axles division. The technical expertise of the international majors will make it possible for the company to maker deeper inroads in these businesses than if it had pursued these businesses independently.

This will also free the company's resources for its vehicle business. The move will have a positive impact on its profitability as interest cost will reduce significantly and will ease the company's cash flow position. Sale of the units will also reduce debt burden to a large extent. This will be reflected in the company's FY01/FY02 results.

Market view:
Analysts have taken a very positive view of the company's decision to hive-off the components into separate subsidiaries. They have reiterated a LONG TERM BUY on the company.

Equitymaster requests your view! Post a comment on "Tata Engg. set to looker leaner ... and meaner". Click here!


More Views on News

TATA MOTORS Announces Quarterly Results (2QFY20); Net Profit Up 117.4% (Quarterly Result Update)

Oct 29, 2019 | Updated on Oct 29, 2019

For the quarter ended September 2019, TATA MOTORS has posted a net profit of Rs 2 bn (up 117.4% YoY). Sales on the other hand came in at Rs 654 bn (down 9.3% YoY). Read on for a complete analysis of TATA MOTORS's quarterly results.

TATA MOTORS Announces Quarterly Results (1QFY20); Net Profit Down 58.4% (Quarterly Result Update)

Jul 29, 2019 | Updated on Jul 29, 2019

For the quarter ended June 2019, TATA MOTORS has posted a net profit of Rs 34 bn (down 58.4% YoY). Sales on the other hand came in at Rs 615 bn (down 8.4% YoY). Read on for a complete analysis of TATA MOTORS's quarterly results.

TATA MOTORS 2018-19 Annual Report Analysis (Annual Result Update)

Jul 5, 2019 | Updated on Jul 5, 2019

Here's an analysis of the annual report of TATA MOTORS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of TATA MOTORS. Also includes updates on the valuation of TATA MOTORS.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

How Much Money Do You Need to Be a Professional Trader? (Fast Profits Daily)

Sep 17, 2020

In this video I'll answer a question I get asked often: How much capital do I really need to trade the markets for a living? Let's find out...


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 25, 2020 (Close)


  • Track your investment in TATA MOTORS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks