Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Tata Motors Ltd.
Q3FY11 – strong beat to consensus
„ JLR continues to drive expectation beat
Revenues at Rs 315bn (+10%qoq) were ahead of our expectation of Rs 306bn due
to higher ASP’s for both JLR and India business. ASP for JLR improved 3% QoQ.
EBITDA was Rs 48.2bn (UBSe- Rs 47bn), up 15% qoq driven by further margin
improvement at JLR. JLR EBITDA margin improved 80bps qoq to 17.4%. JLR
realisation and margins improved on account of favourable product and market
mix and lower incentives. Standalone EBITDA margin at 10.4% was inline with
our expectations as lower RM cost was offset by higher other expenses.
„ Q3FY11 PAT: Rs 24.2bn (+273% YoY); EPS: Rs 39.39
However, PAT while ahead of consensus was slightly below our expectation of Rs
25.2bn due to higher depreciation (+13%qoq) and product development expenses
(+83%QoQ). In addition to QIP of US$750mn during Q3FY11, co. saw conversion
of existing FCCB’s leading to further issuance of 22mn shares. As a result, Net
debt declined to Rs 214bn from Rs 275bn, incl. vehicle financing book of Rs 86bn.
„ Rising JLR capex spend, reduction in disclosure disappointing
Mgmt. indicated JLR capex and R&D run-rate could be higher at GBP 1bn p.a. vs
our expectation of GBP 750m. Also, the co. is no longer giving a pro-forma P&L
for JLR, limiting our understanding of the cost structure for JLR. We continue to
remain positive on the demand outlook for JLR.
„ Valuation: Maintain Buy and price target of Rs.1,500
We value domestic business and subs on 9x 12 month forward EBITDA and JLR
at 5x 12 month fwd EBITDA. We adjust our EBITDA for R&D capitalization.
Q Tata Motors Ltd.
Tata Motors manufactures and sells commercial vehicles, utility vehicles, and
passenger cars in India. Tata Motors is the dominant player in the Indian
commercial vehicles space, with close to a 60% market share in both the
medium and heavy commercial vehicle markets in India as well as light
commercial vehicles. Tata Motors entered the passenger car market in 1998 with
the Indica model. In 2003, it released the mid-size sedan, Indigo, followed by
the Nano in 2009. In June 2008, Tata Motors acquired Jaguar and Land Rover
from Ford. The Tata Group owns 35% of Tata Motors.
Q Statement of Risk
Key risks for Tata Motors remain slowdown in CV demand in India, decline in
sales of Jaguar and Land Rover and inability to refinance debt on account of
acquisitions. Decline in demand for company's cars and LCV's remain the other
key risk.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Tata Motors Ltd.
Q3FY11 – strong beat to consensus
„ JLR continues to drive expectation beat
Revenues at Rs 315bn (+10%qoq) were ahead of our expectation of Rs 306bn due
to higher ASP’s for both JLR and India business. ASP for JLR improved 3% QoQ.
EBITDA was Rs 48.2bn (UBSe- Rs 47bn), up 15% qoq driven by further margin
improvement at JLR. JLR EBITDA margin improved 80bps qoq to 17.4%. JLR
realisation and margins improved on account of favourable product and market
mix and lower incentives. Standalone EBITDA margin at 10.4% was inline with
our expectations as lower RM cost was offset by higher other expenses.
„ Q3FY11 PAT: Rs 24.2bn (+273% YoY); EPS: Rs 39.39
However, PAT while ahead of consensus was slightly below our expectation of Rs
25.2bn due to higher depreciation (+13%qoq) and product development expenses
(+83%QoQ). In addition to QIP of US$750mn during Q3FY11, co. saw conversion
of existing FCCB’s leading to further issuance of 22mn shares. As a result, Net
debt declined to Rs 214bn from Rs 275bn, incl. vehicle financing book of Rs 86bn.
„ Rising JLR capex spend, reduction in disclosure disappointing
Mgmt. indicated JLR capex and R&D run-rate could be higher at GBP 1bn p.a. vs
our expectation of GBP 750m. Also, the co. is no longer giving a pro-forma P&L
for JLR, limiting our understanding of the cost structure for JLR. We continue to
remain positive on the demand outlook for JLR.
„ Valuation: Maintain Buy and price target of Rs.1,500
We value domestic business and subs on 9x 12 month forward EBITDA and JLR
at 5x 12 month fwd EBITDA. We adjust our EBITDA for R&D capitalization.
Q Tata Motors Ltd.
Tata Motors manufactures and sells commercial vehicles, utility vehicles, and
passenger cars in India. Tata Motors is the dominant player in the Indian
commercial vehicles space, with close to a 60% market share in both the
medium and heavy commercial vehicle markets in India as well as light
commercial vehicles. Tata Motors entered the passenger car market in 1998 with
the Indica model. In 2003, it released the mid-size sedan, Indigo, followed by
the Nano in 2009. In June 2008, Tata Motors acquired Jaguar and Land Rover
from Ford. The Tata Group owns 35% of Tata Motors.
Q Statement of Risk
Key risks for Tata Motors remain slowdown in CV demand in India, decline in
sales of Jaguar and Land Rover and inability to refinance debt on account of
acquisitions. Decline in demand for company's cars and LCV's remain the other
key risk.
No comments:
Post a Comment