Tata Motors New launches to drive performance, Retain BUY :Emkay

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Tata Motors

New launches to drive performance, Retain BUY

BUY

CMP: Rs846                                        Target Price: Rs1,230

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n     EBIDTA/APAT at Rs 42.3bn/21.7bn were ~7%/4% above est. driven by JLR.  JLR reports FCF of GBP 117mn despite capex/R&D of GBP 400mn. Net D/E was 0.18x  (Mar11 - 0.24x)

n      Standalone business continues to disappoint. Company is facing cost/demand pressure across business segments

n     Volume outlook remains strong for JLR with launch of Evoque, new XF (2.2 ltr diesel) and also XF 2012

n     Lower FY12/FY13 EPS estimates by 11%/9% to Rs 138/155 to factor in deteriorating macro environment (lower valuation multiple). Retain BUY with a TP of Rs 1,230 (down ~15%)