Bullish on Tata Motors among auto stocks: Deven Choksey

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, shares his views on auto space. Excerpts:

ET Now: I want to get you in on Tata Motors and Ashok Leyland. If you were to stack up both of these, which one would you pick out for a fresh investment now?

Deven Choksey: Looking at the valuation at which Tata Motors is quoting vis-à-vis Ashok Leyland, certainly the case is for Tata Motors. If the rate of interest starts coming down which in all likelihood will happen at some point of the time in the second half of the financial year. You would see it benefiting the automobile industry in general and more particularly the commercial vehicle space and one could possibly consider buying the Tata Motors kind of a company in the portfolio.

In the last quarter, they had seen better performance coming in from the local side. As far as the cost management is concerned, most probably the write-offs which were to take place including some of the VRS, have been already over in the books. So, obviously with the encouraging booking number from the new passenger vehicle Zest along with the likely off-take of the commercial vehicle segment in the second half of the financial year, domestic market portfolio for Tata Motors should certainly do well.

JLR, certainly, has lot of new products which are coming up in balance part of the 2014 and 2015 thereafter. To a greater extent, it is likely to drive the numbers for the international market portfolio of Tata Motors and passenger vehicle. So overall, I am more confident about Tata Motors and if I have to buy, I could also consider buying into the DVR stock of Tata Motors which could possibly give slightly better appreciation compared to the underlying stock as far as investment is concerned.