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THE Tata Motors stock has been at the forefront of the stock market rally, appreciating by about 60 per cent over the last three months.

Given the underlying fundamentals, there is further scope for gains. Investors can buy into the stock at the current price of Rs 254.

Tata Motors is riding the crest of a boom in the commercial vehicles (CV) industry, which has grown by 26 per cent in the first four months of 2003-04.

The company's CV sales have risen by 34 per cent in the same period.

Meanwhile, the Indigo is on the fast lane and notched up sales of 2,664 cars in July '03, the highest monthly sales in the "C" segment since 1996.

Margins on this car, which shares the same platform with the Indica, are superior compared to the latter.

With no near-term threat looming, the dominance of the Indigo appears set to continue for some more time.

The good monsoon is bound to have a favourable impact on CV sales. In this backdrop, Tata Motors appears set for impressive earnings growth in the near-term.

BL Research Bureau

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