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Tata Motors (TAMO.BO; Rs1,028.40; 1M)
Takeaways from Mumbai - Tata Motors presented at the Citi India Investor
Conference in Mumbai. Below are key takeaways.
"Cautious optimism" was the takeaway from Tata Motors' mgmt – Macro
overhangs exist, including rising interest rates, fuel costs, and decelerating
industrial production activity. That said, mgmt reiterated overall FY12 volume
guidance for the domestic MHCV and LCV business was 10% / 20% respectively.
Management noted that dealer inventory is healthy at ~2.5 weeks, vs. trend level
of four weeks.
Stable margins - Management noted that the endeavour is to improve margins
in the domestic business to around 10%, through a combination of higher prices
(hiked 2-2.5% in April) and cost cutting initiatives. Within JLR, management
noted that margins should be ~16%, excluding any currency impacts, and after
factoring in the mix shift for the Evoque.
JLR volume outlook was affirmed at 300k units in FY12 - vs. ~243k in FY11
– A large proportion of the growth (~25k units) should be driven by the Range
Rover Evoque, which has received 10,000 firm bookings and 150,000 enquiries.
China is expected to contribute ~40k units.
JLR capex reaffirmed at £1.5bn / annum - Management noted that capex will
be funded through internal accruals; balance-sheet integrity will be of prime
importance; in the event of a deterioration in profits, the capex might be deferred.
The overall longterm debt-equity target was stated as 0.5-0.7x net debt/equity.
Separately, management noted that the news flow (source: CNBC) saying that
the company plans to raise US$500m was incorrect.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tata Motors (TAMO.BO; Rs1,028.40; 1M)
Takeaways from Mumbai - Tata Motors presented at the Citi India Investor
Conference in Mumbai. Below are key takeaways.
"Cautious optimism" was the takeaway from Tata Motors' mgmt – Macro
overhangs exist, including rising interest rates, fuel costs, and decelerating
industrial production activity. That said, mgmt reiterated overall FY12 volume
guidance for the domestic MHCV and LCV business was 10% / 20% respectively.
Management noted that dealer inventory is healthy at ~2.5 weeks, vs. trend level
of four weeks.
Stable margins - Management noted that the endeavour is to improve margins
in the domestic business to around 10%, through a combination of higher prices
(hiked 2-2.5% in April) and cost cutting initiatives. Within JLR, management
noted that margins should be ~16%, excluding any currency impacts, and after
factoring in the mix shift for the Evoque.
JLR volume outlook was affirmed at 300k units in FY12 - vs. ~243k in FY11
– A large proportion of the growth (~25k units) should be driven by the Range
Rover Evoque, which has received 10,000 firm bookings and 150,000 enquiries.
China is expected to contribute ~40k units.
JLR capex reaffirmed at £1.5bn / annum - Management noted that capex will
be funded through internal accruals; balance-sheet integrity will be of prime
importance; in the event of a deterioration in profits, the capex might be deferred.
The overall longterm debt-equity target was stated as 0.5-0.7x net debt/equity.
Separately, management noted that the news flow (source: CNBC) saying that
the company plans to raise US$500m was incorrect.
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