Goldman Sachs Cuts Tata Motors Target By 28%

Goldman Sachs has cut its target price of Tata Motors to Rs 774 from Rs 1,073 citing lower revenue growth outlook amid high local interest rates and global uncertainties.

"We are revising our FY12-14E EPS (earnings per share) estimates on Tata Motors by 12-14 per cent mainly on lower revenue assumptions," the Wall Street bank said in a note Friday.

It expects revenues to be 3-5 per cent lower mainly on lower auto demand forecast for U.S. and Europe and weaker year-to-date volume growth performance of the domestic passenger car and Jaguar Land Rover business.

It has maintained its neutral rating on the stock, adding that it did not view the recent correction as an attractive opportunity to buy the stock as "valuation appears inline with global auto peers on relative returns based analysis."

Shares in the company ended at Rs 712.35, down 5.28 per cent in a weak Mumbai market, which ended 1.99 per cent lower at 16,141.67.

(Reuters)