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J L R t h e s h i n i n g s t a r a s d o m e s t i c l o s e s s h e e n !
Tata Motors (TML) reported quarterly numbers, which were a mixed bag
as the domestic business dragged while JLR clocked strong volumes and
a good margin performance. The consolidated topline came above our
estimates at ~| 35,939 crore (I-direct estimate: ~| 35,003 crore) (up
25.8% YoY) as JLR’s topline grew to ~£2929 million (up 30.3% YoY) and
standalone business grew to ~| 12,954 crore (up 15.2% YoY). The
consolidated EBITDA margin was in line with our estimates at 13.4% (Idirect estimate: 13.5%), a rise of 10 bps QoQ. This was led by stronger
other expense management on the group even as pressure rose from
higher staff costs in JLR (up ~9% QoQ) and decline in standalone
margins (down 120 bps QoQ at 7.2%).TML has undertaken ~1% price
hike in the CV segment to reduce costs pressures. JLR margins came in at
14.9% (down 170 bps YoY) as currency led to ~130 bps of the same. The
reported PAT came in at | 1887 crore (I-direct estimate: | 2277 crore).
However, adjusted for notional MTM losses on revaluation of foreign
loans, the PAT stood at | 2316 crore while JLR and standalone PAT came
in at £237.5 million and | 102 crore, respectively.
Highlights of the quarter
On the positive side, the domestic CV segment has weathered the rough
H1 with beyond expectations volume growth in the MHCV and LCV
segment of ~8%, 29% YTD, respectively. The negative remained on the
domestic compact car segment and entry level sedan segment, which has
seen strongest buyer sentiment dent with TML witnessing ~18% YTD
decline. On JLR, volumes have gone up 23.3% YoY at 68,000 units with
ASPs rising ~5.7% YoY, with favourable geography mix led by China.
V a l u a t i o n
In line with our previous report in which spoke of overreaction towards
investor fears of recession we seem to have been proven right in terms of
stock outperformance in the recent period. The strong volume up-tick in
JLR volumes has led to the same. We remain positive on its outlook in the
near and long term. We have factored in the standalone drag ahead in H2,
thereby leading to SOTP target price of | 221. We have a BUY rating on
the stock. All investors who had entered at previous levels are suggested
to hold the stock with a longer term outlook.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
J L R t h e s h i n i n g s t a r a s d o m e s t i c l o s e s s h e e n !
Tata Motors (TML) reported quarterly numbers, which were a mixed bag
as the domestic business dragged while JLR clocked strong volumes and
a good margin performance. The consolidated topline came above our
estimates at ~| 35,939 crore (I-direct estimate: ~| 35,003 crore) (up
25.8% YoY) as JLR’s topline grew to ~£2929 million (up 30.3% YoY) and
standalone business grew to ~| 12,954 crore (up 15.2% YoY). The
consolidated EBITDA margin was in line with our estimates at 13.4% (Idirect estimate: 13.5%), a rise of 10 bps QoQ. This was led by stronger
other expense management on the group even as pressure rose from
higher staff costs in JLR (up ~9% QoQ) and decline in standalone
margins (down 120 bps QoQ at 7.2%).TML has undertaken ~1% price
hike in the CV segment to reduce costs pressures. JLR margins came in at
14.9% (down 170 bps YoY) as currency led to ~130 bps of the same. The
reported PAT came in at | 1887 crore (I-direct estimate: | 2277 crore).
However, adjusted for notional MTM losses on revaluation of foreign
loans, the PAT stood at | 2316 crore while JLR and standalone PAT came
in at £237.5 million and | 102 crore, respectively.
Highlights of the quarter
On the positive side, the domestic CV segment has weathered the rough
H1 with beyond expectations volume growth in the MHCV and LCV
segment of ~8%, 29% YTD, respectively. The negative remained on the
domestic compact car segment and entry level sedan segment, which has
seen strongest buyer sentiment dent with TML witnessing ~18% YTD
decline. On JLR, volumes have gone up 23.3% YoY at 68,000 units with
ASPs rising ~5.7% YoY, with favourable geography mix led by China.
V a l u a t i o n
In line with our previous report in which spoke of overreaction towards
investor fears of recession we seem to have been proven right in terms of
stock outperformance in the recent period. The strong volume up-tick in
JLR volumes has led to the same. We remain positive on its outlook in the
near and long term. We have factored in the standalone drag ahead in H2,
thereby leading to SOTP target price of | 221. We have a BUY rating on
the stock. All investors who had entered at previous levels are suggested
to hold the stock with a longer term outlook.
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