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UBS Investment Research
„ JLR vols rise 2% YoY for Mar’11, up 16%YoY for Q4FY11
JLR reported shipment vols. of 24,101units in Mar’11. While the growth is only
2%YoY for the month, this according to the co. has to be seen in light of the 300k
p.a. (25k/mth) capacity of the co. The co. had therefore built some stocks ahead of
March, which is a strong month in UK from demand perspective. Retail sales were
strong according to the co. Overall growth for the qtr was a strong 16%YoY.
„ JLR demand environment robust, engine constraints to be resolved soon
According to the co. the demand environment remains robust in UK and US. China
is likely to remain strong. Russia may see increase in demand with rising oil prices.
Jaguar sales remain partly weak due to component supply constraints for some
engines. Mgmt. expects these to be resolved by May/Jun’11.
„ Remain positive on robust JLR outlook, domestic slowdown in the nos.
JLR FY11 vols of 241,571 units is 2.5% ahead of our estimate. Our nos. imply
only 11%YoY vol. grth in FY12. We believe our nos. remain can be exceeded on
potentially strong response to forthcoming launch of ‘Evoque’ crossover and
strong growth in US and China. Our FY12 estimates already factor in only
10%YoY domestic MHCV vol. grth along with weaker margins. We therefore see
limited downside to our nos.
„ Valuation: Maintain Buy, PT 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.
JLR reports robust vols for March
„ JLR vols rise 2% YoY for Mar’11, up 16%YoY for Q4FY11
JLR reported shipment vols. of 24,101units in Mar’11. While the growth is only
2%YoY for the month, this according to the co. has to be seen in light of the 300k
p.a. (25k/mth) capacity of the co. The co. had therefore built some stocks ahead of
March, which is a strong month in UK from demand perspective. Retail sales were
strong according to the co. Overall growth for the qtr was a strong 16%YoY.
„ JLR demand environment robust, engine constraints to be resolved soon
According to the co. the demand environment remains robust in UK and US. China
is likely to remain strong. Russia may see increase in demand with rising oil prices.
Jaguar sales remain partly weak due to component supply constraints for some
engines. Mgmt. expects these to be resolved by May/Jun’11.
„ Remain positive on robust JLR outlook, domestic slowdown in the nos.
JLR FY11 vols of 241,571 units is 2.5% ahead of our estimate. Our nos. imply
only 11%YoY vol. grth in FY12. We believe our nos. remain can be exceeded on
potentially strong response to forthcoming launch of ‘Evoque’ crossover and
strong growth in US and China. Our FY12 estimates already factor in only
10%YoY domestic MHCV vol. grth along with weaker margins. We therefore see
limited downside to our nos.
„ Valuation: Maintain Buy, PT 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.
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