How can one invest in Tata Motors and Tata Power in SIP mode considering the current market situation?

Let us take the two stocks mentioned and look at their last 1-year performance

Tata Motors

The share price has corrected by ~17%

Considering this, few things can be stated for Tata Motors:

• This stock will be under pressure owing to the high price of commodities and turbulent semiconductor supply chain
• Tata Motors overall revenues will be flat as Jaguar Land Rover (JLR) sales will be impacted by recession like situation in Europe and uncertainties in China owing to Covid-19
• With high inflation and rising interest rates, the domestic market may see muted growth in the coming quarters

Tata Power

The share price has flat return of ~2.3%

Considering this, few things can be stated for Tata Power:

• Rising Coal prices will eat into the profit margin of utility services
• With lower liquidity, the appetite for Green Bonds might be lower, a vehicle chosen to raise money for renewable energy projects
• With rising commodity prices, the cost of solar panels will be an important consideration for ongoing & future projects

Now coming to the question,

How can one invest through the SIP Route in Tata Motors & Tata Power?

1. Both the companies have carved a niche for their product/service and this is meant to give a returns when the global situation settles down. Considering this, SIP Route for regular buying of these stocks is a well graded approach
2. Both the stocks are more than 10% down from their highs and this seems to be a good entry point for an investor
3. An investor can follow a 20–30–30–20 approach.
   1. 20% of Capital at +/- 5% through monthly SIP
   2. 30% of Capital (10% Appreciation) at -10% through monthly SIP
   3. 30% of Capital (10% Appreciation) at -10% through monthly SIP
   4. 20% of Capital (20% Appreciation) at -5% through monthly SIP
4. Till the correction/appreciation is +/- 5% from the current value, an investor can keep deploying 20% of the earmarked capital

Kindly note, this is not a recommendation but an answer to the query that has put across

Hope this helps

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