Tata Motors Ltd. Focus shifts to 2HFY12, Retain BUY :Emkay

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Tata Motors Ltd.

Focus shifts to 2HFY12, Retain BUY

BUY

CMP: Rs951                                        Target Price: Rs1,450

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n     Evoque’s order book stands at ~20,000 units. Wholesale billings to start from August and retail from Sep. Maintain volume guidance based on Evoque and recovery in XF

n     Discounts in line with industry standards.  No significant increase in discounts from company. Higher discounts limited to specific models/dealers

n     1QFY12 to be impacted by adverse forex and Evoque related costs. We est. JLR EBITDA margin to be 13.4% in 1QFY12 (-160bps YoY) resulting in conso PAT of Rs 20.9bn (3%YoY)

n     Maintain BUY rating with a TP of Rs 1,450 based on SOTP. Key concerns arise from higher capex (GBP 1.5bn) and lack of clarity w.r.t. new emission norms