Insights

Tata Motors Ltd

March 13, 2017 . Equities Desk

JLR’s volume outlook remains strong!

Tata Motors (TAMO) is India’s largest CV manufacturer with 55% market share in M&HCV segment. Besides, it also manufactures passenger cars and utility vehicles. With the acquisition of Jaguar Land Rover (JLR) from Ford in 2008, TAMO now has presence in the global luxury car market. Importantly, TAMO derives about 82% of its revenue from JLR.

View & Valuvation

We maintain positive stance on the stock given its healthy product pipeline for JLR coupled with revival of standalone business. We expect revenue & PAT to grow at a CAGR of 11% and 56% respectively over FY17-19E. We expect overall EBITDA margin would expand to 13.9% by FY19E from 11% in FY17. We value the stock on SOTP basis, ascribing separate values to JLR (3.5xEV/EBITDA), China JV (3.5x EV/EBITDA), Standalone (8x EV/EBITDA) and investments in subsidiaries (using P/E, P/BV), we arrive at a TP of Rs. 518. Maintain BUY.

Research Report Tata Motors Ltd

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