Tata Motors to increase prices of PVs from April 1, 2011

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Tata Motors to increase prices of PVs from April 1, 2011
Tata Motors is set to increase prices of its passenger vehicles (PV) by  `7,000–36,000,
depending upon the models from April 1, 2011, in an attempt to offset the effect of rising
input costs. The price hike comes on expected lines as the company continues to reel under
the pressure of rising commodity costs and  aims to shield its operating margins by
continuous cost-control initiatives coupled with price increases.
In passenger cars, depending upon the model, Indica prices will go up by `7,000–9,000,
prices of Vista and Indigo CS will increase by `8,000–11,000 and Manza prices will rise by
`10,000–15,000. In utility vehicles, depending upon the model, Sumo prices will go up by
`13,000–15,000, Grande prices will increase by `16,000–19,000, prices of Safari will rise
by  `18,000–29,000,  Aria prices will go up by  `30,000–36,000 and  Venture prices will
increase by `9,000–12,000.
At  `1,118, the stock is trading at attractive valuation of 8.1x its FY2012E earnings. We
maintain our Buy rating on the stock with an SOTP Target Price of `1,384.