Ford Motor Company (F), General Motors Company (GM): Is Tata Motors Limited (ADR) (TTM) a Good Buy?

Likewise, General Motors Company (NYSE:GM) also saw impressive sales performance in July, with U.S. sales rising 16%. General Motors Company (NYSE:GM)’s retail sales increased 23%, while its passenger car sales rose 24% in the month of July. Chevrolet car sales rose 31%, driven by a record month for the Spark. The Cruze also registered record July sales. Cadillac car sales rose 34% in the month of July.

The premium car segment in the U.S. has also performed reasonably well. More importantly, Jaguar’s share rose in the U.S. even though the market continues to be strongly competitive.

Finally, the Eurozone has also shown signs of improvement in the last two months. This was further highlighted by the data released earlier today.

Overall, the economic environment in Jaguar Land Rover’s main markets continues to improve. Therefore, we can expect the operational results to further improve from here.

Weak rupee provides further boost

A weak rupee provides further boost to Tata Motors’s results, given that Jaguar Land Rover’s net revenues are primarily generated from overseas. The outlook for the Indian rupee remains bearish in the near-term, with several analysts expecting the Indian currency to hit 70 rupees against the U.S. dollar. While this will not help Tata Motors’s domestic operations, it will certainly boost its results from Jaguar Land Rover, and since the unit accounts for a significant portion of Tata Motors’s revenue, it will more than offset the weakness in the Indian operations.

Valuation attractive

What makes Tata Motors Limited (ADR) (NYSE:TTM) even more attractive currently is valuation. The stock is only trading at a P/E ratio of 9.76. This is below the P/E ratio of U.S. automakers such as Ford Motor Company (NYSE:F) (10.81), and General Motors Company (NYSE:GM) (12.31).

Tata Motors shares have fallen more than 18% in the last three months, however, I think the pullback is an excellent buying opportunity, given the strong performance of Jaguar Land Rover.

The article Is Tata Motors a Good Buy? originally appeared on Fool.com and is written by Varun Chandan, Arora.

Varun Chandan Arora has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

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