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E x p e c t a t i o n s s u r p a s s e d a s J L R “ E v o q u e s ”
Tata Motors (TML) has been one of our conviction stocks. TML has
allayed all the fears of the analyst fraternity regarding growth prospects in
JLR due to a so called “imminent recession” in CY11. The JLR business
has witnessed strong volume growth (up ~24% YTD FY12 at 2,17,108
units) led by popular Land rover products (Evoque, RR-Sport) at 1,77,364
units, up ~34% YTD. We have taken cognisance of the new growth orbit
of LR products, which has beaten our estimates. Considering this and JLR
we are more hopeful of witnessing a better domestic MHCV performance
in FY13E contrary to market expectations. We believe steeper interest rate
cuts and higher focus on GFCF (contribution to GDP at six year low) by
policy makers will help in a pick-up of business climate by ~H2FY13E.
ƒ December 2011 volumes enter new orbit as “Evoque” ramps up
JLR reported all-time high monthly volumes of 30,981 units for December
2011, up ~45% with both Land Rover and Jaguar rising ~54% and 9%,
respectively. This has been accelerated by the first month of complete
global sales for “Evoque” of ~9,000 units. The geographical demand has
been fuelled by emerging markets like China, Brazil along with the
developed markets of the US. We believe any Euro zone volume
moderation will be easily overcome by strong emerging market demand.
We expect JLR to clock in excess of ~2,95,000 units for FY12E.
O u t l o o k & V a l u a t i o n
We remain positive on the long term outlook and expect to witness
upgrades both in terms of earnings and valuations for domestic as well as
JLR business. We have upgraded our SOTP target price of | 241 and have
a BUY rating on the stock. All portfolio investors with a two year horizon
who had averaged at lower levels are advised to keep holding positions.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
E x p e c t a t i o n s s u r p a s s e d a s J L R “ E v o q u e s ”
Tata Motors (TML) has been one of our conviction stocks. TML has
allayed all the fears of the analyst fraternity regarding growth prospects in
JLR due to a so called “imminent recession” in CY11. The JLR business
has witnessed strong volume growth (up ~24% YTD FY12 at 2,17,108
units) led by popular Land rover products (Evoque, RR-Sport) at 1,77,364
units, up ~34% YTD. We have taken cognisance of the new growth orbit
of LR products, which has beaten our estimates. Considering this and JLR
we are more hopeful of witnessing a better domestic MHCV performance
in FY13E contrary to market expectations. We believe steeper interest rate
cuts and higher focus on GFCF (contribution to GDP at six year low) by
policy makers will help in a pick-up of business climate by ~H2FY13E.
ƒ December 2011 volumes enter new orbit as “Evoque” ramps up
JLR reported all-time high monthly volumes of 30,981 units for December
2011, up ~45% with both Land Rover and Jaguar rising ~54% and 9%,
respectively. This has been accelerated by the first month of complete
global sales for “Evoque” of ~9,000 units. The geographical demand has
been fuelled by emerging markets like China, Brazil along with the
developed markets of the US. We believe any Euro zone volume
moderation will be easily overcome by strong emerging market demand.
We expect JLR to clock in excess of ~2,95,000 units for FY12E.
O u t l o o k & V a l u a t i o n
We remain positive on the long term outlook and expect to witness
upgrades both in terms of earnings and valuations for domestic as well as
JLR business. We have upgraded our SOTP target price of | 241 and have
a BUY rating on the stock. All portfolio investors with a two year horizon
who had averaged at lower levels are advised to keep holding positions.
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