Tata Motors -JLR records best ever monthly sales :Macquarie Research,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Tata Motors
JLR records best ever monthly sales
Event
 Tata Motors’ subsidiary Jaguar Land Rover (JLR) reported strong wholesale
volume growth of 42% for the month of September. This strong growth was
driven by the new models (Evoque and new XF) and the emerging markets
(China). The product mix and the geographical mix too have been favourable
for the profit margins. We maintain Outperform rating with a TP of Rs250.
Impact
 JLR wholesale volumes grew 42%YoY to 27,639 vehicles in September.
Land Rover sales were 22,114 (+51%), while Jaguar sales were 5,525
(+14%). LR sales include 6,000 units of Evoque, for which dispatches started
in Aug-end. Even without Evoque, LR sales grew by 10%. We expect the
sales momentum to continue as Evoque and other 2012MY cars are launched
in more markets. YTD sales for JLR stand at 130,090 (+14%).
 Retail sales have been strong. In September, retail sales increased 26%
YoY, driven by new models and faster growth in emerging markets.
 In UK, new XF 2.2L accounted for 1/3 of total Jaguar registrations. Range
Rover sales were up 97%YoY driven by the Evoque launch.
 Europe sales were up 33%YoY due to the introduction of Evoque and the
XF 2.2L, which accounted for 43% of all European XF sales.
 In North America, total sales were up 10%, with XF sales up 33% and
Range Rover Sport sales up 38%.
 In China, Jaguar and LR sales grew 157% and 85%, respectively.
 JLR to launch 40 new cars over the next 5 years. The new models are
aimed towards the widening of the addressable customer base – both at the
upper and lower end of the luxury car markets. Over the next three years, JLR
will be spending GBP800mn annually on new product/technology development.
 China local production will open way for faster growth. Company is at an
advanced stage of negotiations with the local companies for a JV to set up an
assembly plant in China. We believe post localisation, JLR will become more
competitive in the market. For the imported JLR cars, over 50% of sticker
price is tax. We believe post localisation, the cost can be reduced by 30%.
Earnings and target price revision
 No change.
Price catalyst
 12-month price target: Rs250.00 based on a Sum of Parts methodology.
 Catalyst: Monthly sales numbers and customer response to new products
Action and recommendation
 Reaffirm Outperform. We remain positive on the JLR business in terms of
both volume potential and margins. TTMT is trading 6.6x FY13E PER.