Tata Motors shares gained over 8 per cent on sales data for September and reports that its Jaguar Land Rover unit’s US sales surged.

Tata Motors rallied on Monday after reports emerged that PSA Peugeot Citroen and Tata Motors are in talks to form a partnership that might result in Tata producing and distributing the French giant’s cars in the Indian market.

The stock was the top gainer on both Sensex and Nifty.

The shares also got a a boost after the company’s September MHCV sales beat estimates, while unit Jaguar Land Rover US Sept sales rose 61 per cent.

At 1.22 pm, Tata Motors shares were trading 6.87 per cent up at Rs 317.40. The Sensex was up 432.99 points at 26,653.94 during the same time.

Shares of Tata Motors jumped 8.41 per cent to Rs 322 on BSE in early trade. On the NSE, shares of the company surged 8.17 per cent to Rs 322.10.

Tata Motors’ sales of passenger cars in September were higher by 5 per cent at 10,226 units, as compared to 9,766 units in same period of last year.

Meanwhile, BSE has sought clarification from Tata Motors with reference to news of Peugeot. As per media reports, the company is in talks with PSA Peugeot Citroen to form a partnership that might result in Tata producing and distributing the French giant’s cars for
the Indian market.

With PTI and Reuters inputs

Domestic markets to remain buoyant in the medium to long term.(Photo: PTI)

Aashish Somaiyaa, chief executive officer, Motilal Oswal AMC

After a rate cut of 50 basis points by the Reserve Bank of India in its fourth bi-monthly monetary policy on September 29, Aashish Somaiyaa, chief executive officer, Motilal Oswal AMC tells Financial Express Online that international developments, domestic political events and continued economic data, especially corporate performance will give direction to the markets. He added foreigners will fall in love with India all over again and this time more strongly with a lot of positive discrimination in our favour. Here are the excerpts from the interview:

Q. What is your take on a 50 basis points rate cut by the Reserve Bank of India?
A. It was definitely a positive surprise. Our belief is that he RBI has made best use of limited window of opportunity created by the unexpected continued pause stance of the US Fed. This 50 basis points cut will give much needed fillip and more importantly a positive guidance for the direction of the economy from here on.

Q. How it will impact public and private sector banks?
A. Accommodatory stance is a relief for both types of banks from perspective of a bottoming signal to economic woes, treasury gains and stress on account of continued high rates. It’s a larger relief for public sector banks whose fortunes are more closely linked to economic prospects. Capitalisation of banks coupled with a relaxed monetary stance are steps in right direction to kick start banks ability to engender and participate in a revival of investment cycle.

Q. How do you see infrastructure sector after the rate cut?
A. We don’t see any immediate impact except that with some lag effect one can see early signs of revival in the investment cycle and some relief on debt servicing burden. This doesn’t immediately change economic prospects of infrastructure companies from a shareholders perspective.

Q. Do you think RBI rate cut will bring in some cheer for the auto and real estate sectors? 
A. These two sectors would be the biggest beneficiaries more so real estate in light of relaxed provisioning norms for affordable housing as a sector.

Q. Do you expect further rate cuts in the ongoing financial year? Why?
A. We do not expect any further rate cuts before clarity on the movements of the US Fed. We find it hard to visualise continued rate cuts in India were the Fed to get into a step by step rate hike cycle.

Q. How do you see domestic equity markets at the current juncture? Where do you see Sensex and Nifty by March 2016?
A. We see continued buoyancy in domestic markets in the medium to long term. In the short term, one has to be prepared for high volatility emerging mainly from the international scenario plus domestic political events. Over the next 3 to 5 years we expect India to decouple from other emerging markets basket and stand out as an investment destination or asset class on its own.

As an investor in the markets, we are strictly bottom up and our level of confidence comes from economic performance of the companies that we buy. We firmly believe that returns come from earnings and not from stock markets whose main function is to provide liquidity and price discovery. Hence, we do not predict market levels. If I had to hazard a guess, keeping all factors in mind I would say we are very attractively priced. We are at a level which we saw before the election results of 2014 which were accompanied by some of the worst macros. All of that is behind us and but we are back where we were.

Q. After the rate cut, what are the other factors which can give direction to markets from here?
A. I would say international developments, domestic political events and continued economic data especially corporate performance.

Q. What are the key concerns facing the economy? Are global issues also having an adverse impact?
A. I think local concerns are overstated, we need to watch for news emanating from China and the reaction of developed economies as well as developed market investors to those news.

Q. Do you see a lacklustre market for some time or will there be some renewed interest after the recent fall?
A. We are confident of sustained interested in Indian markets. Domestic investors are continuing to invest. It’s not only relative attractiveness of equities compared to other asset classes but also sustained entry of new generation of investors into markets. Habits change with generations and hence equity is here to stay as a staple allocation for investors from here on.

Q. What is your take on FII activity that we have seen so far? In the first FIIs half of the ongoing financial year net outlows by FII were over 14,000 crore, how do you see the second half? Do you think this outflow will continue?
A. In the near term, I would say their behaviour will be unpredictable because when there is adverse development the selling tends to be indiscriminate. But as we saw in 2008 when the dust settled we got more money than we lost. I expect foreigners to fall in love with India all over again and this time more strongly with a lot of positive discrimination in our favour.

Jefferies has downgraded Maruti Suzuki India to ‘underperform’ from ‘buy’.

Maruti Suzuki shares declined as much as 1.9 per cent in the early trade on Monday after Jefferies downgraded the carmaker’s stocks to ‘underperform’ from ‘buy’. According to the global investment bank, Maruti’s strong outlook is in the price and its stock is trading at all-time high multiples.

At 9.55 am, Maruti Suzuki shares were trading 1.79 per cent down at Rs 4497.90 a piece. The scrip opened at Rs 4,572 and had touched a high and low of Rs 4572 and Rs 4492.20, respectively, in trade so far.

“The stock trades at peak multiples when profitability is also at peak. The company is stepping out of areas of core competence – focusing on larger cars, outsourcing manufacturing but raising investment in R&D, land and parallel distribution – with risks associated,” said, analysts Govindarajan Chellappa and Apurva Kumar at Jefferies.

Shares of Maruti Suzuki India are trading at 21.83 times of 1 year forward earnings compared to 18.6 times of rivals. Stock has 44 buy, 5 hold and nil sell ratings.

For the quarter ended June 2015, Maruti Suzuki posted net profit of Rs 1,192.92 crore, up 56.49 per cent against Rs 762.28 crore in the corresponding quarter a year ago.

For the April-September period, the domestic sales for the company stood 12.7 per cent higher at 6,28,963 compared to 5,58,330 units in the same period last year.

(With inputs from Reuters)

Maruti Suzuki stocks will be in focus as global investment bank Jefferies has downgraded its stocks to “underperform” from “buy”.

The BSE Sensex and NSE Nifty opened on a positive note on Monday following strong global cues. At 9.21 am, Sensex was up 317.91 points at 26,538.86. Similarly, Nifty was up 85.60 points at 8,036.50 during the same time.

Stocks that are likely to be in focus today

Adani Ports: Adani Ports and Larsen & Toubro (L&T) on Saturday said that they have inked a pact to oversee operations of Kattupalli Port in Tamil Nadu.

SBI: The public sector bank on Sunday said that it will charge up to 10% for home loans, which makes effective reduction in rates only 20 basis points as against 40 basis point cut in base rate.

Tata Steel: The company is set to commission the first phase of its Kalinganagar plant, where it has invested Rs 22,000 crore so far, in the next fiscal.

Larsen and Toubro: The stocks of the company will be in focus as Citi has upgraded Larsen and Toubro from ‘neutral’ to ‘buy’.

ICICI Bank: The private sector lender on Thursday reduced its base rate by 35 basis points to 9.35%, effective October 5.

Parsvnath Developers: The realty company said on Sunday that its shareholders have approved the company’s special resolution to raise up to Rs 1,000 crore through private placement of non-convertible debentures (NCDs).

Maruti Suzuki: The stocks of the carmaker will be in focus after Jefferies downgraded its stocks to “underperform” from “buy”. It said the carmaker’s strong outlook is in the price and its stock is trading at all-time high multiples.

NTPC: The state-run company will consider selling electricity to Bangladesh from its upcoming 750 MW plant at Kokrajhar in Assam once the neighbouring country finalises plans to buy power from Palatana project in Tripura.

National Buildings Construction Corporation (NBCC): The company has secured total business amounting Rs 276.96 crore (approximately) from various clients in the month of September, 2015.