Tata Motors :JLR US retail sales up 36% y-y: Nomura Research

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Tata Motors: Weak quarter impacted by one-off provisions in standalone ops ::Kotak Sec, report

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Weak quarter impacted by one-off provisions in standalone ops. JLR reported EBITDA of GBP1.1 bn (+8% yoy), led by 10% yoy growth in net revenue. Headline EBITDA margin declined sequentially by 80 bps, but on a recurring basis (excluding oneoff gains and currency hedge impacts), EBITDA margin improved by 120 bps, led by a richer product mix and a favorable currency. The standalone business performance was impacted by a one-time provision of `6.5 bn, which led to a significant increase in losses. We maintain our BUY rating on the stock as we believe JLR product momentum is likely to be robust over the next two years and EBITDA margin will be resilient at 18- 19%, led by a favorable currency and product mix.

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Tata Motors - JLR in Ramp up Mode; Warming up for Strong H2CY15; Result Update Q3FY15 ::Edelweiss, report

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“Same old, same old” India negates JLR! • Tata Motors :: ICICI Securities, report

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Soft quarter; outlook remains strong Tata Motors’ 3QFY15http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3011198::HDFC Sec, report

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Udaan - Buy Tata Motors Ltd :: Edelweiss

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JLR in the fast lane :: HDFC Securities

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Tata Motors, Strong earnings growth; reasonably valued profitable carmaker :: ICICI Securities, link

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Tata Motors (2QFY15) : JLR in high gear, India remains weak. BUY :: HDFC Sec, link

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Tata Motors - CY15 to Set The Pace; Result Update Q2FY15:: Edelweiss

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Tata Motors Ltd.|Q2FY15 Result Update | CMP : Rs.524 | Rating : NR | Below street expectation; higher depreciation and tax rate dented bottom line :: IndiaNivesh

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Tata Motors - New Programs to Add Zest: Edelweiss PDF link

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We believe Tata Motors (TTMT) has embarked on its next leg of growth, despite a deteriorating product mix. We deduce that JLR has enough levers for margin and free cash flow surprise (versus expectations) over FY15-17E. The factors that support our thesis include: (1) the China joint venture (JV) can be more remunerative than the existing arrangement of direct sales; (2) the new Discovery Sports (DS) volumes could easily cross previous peak levels (67K in 2007), and profitability will improve on better pricing. Empirical data indicates a spurt in volumes for a model post significant upgrade; 3) capex - R&D spend has been trending down as a % of sales since past 3 years, while recent spurt in total capex was led by pre-ponement of capacity creation. Also, the domestic commercial vehicles (CV) segment is on turnaround mode.

China: Aggressive pipeline; profitable proposition

Our analysis indicates that the Chery JV could improve its profitability depending on the extent of price cuts and level of localisation. Sharp drop in tax and cost savings from localisation are the key margin drivers. Also, China’s product pipeline remains robust with ~5 launches lined up over the next 18-24 months. An underpenetrated dealer network (versus peers) indicates significant headroom for further growth.

Commercial vehicles: Takeaways from recent meeting

Management expects sharp demand revival from Q4FY15. Being industry leader, TTMT has taken proactive measures to reduce discounts in the system. While the M&HCV demand has improved, small CV will take another 6 months to see uptick in demand. Meanwhile, focus is on profitability.

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Tata Motors DVR: Buy : Business Line

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Prospects for Tata Motors appear rosy, with the Jaguar Land Rover business on a roar, and the domestic auto industry beginning to turn around from the slowdown. Investors can cash in on this by buying the Tata Motors DVR (differential voting rights) stock.

At ₹377, the DVR shares trade at a reasonable 6.5 times the company’s estimated consolidated earnings for 2014-15. This valuation is lower than that of Tata Motors, whose shares now trade at 9.1 times.

Historically, the low float and, as a result, lower institutional interest, resulted in the DVRs trading at 40-50 per cent discount to the Tata Motors stock.

But the discount is narrowing, thanks to improved liquidity. Promoter holdings in the DVR are less than one per cent now.

The shares have instead changed hands to domestic and foreign institutional investors.

Considering that the discount has now come down to about 28 per cent and may close in further, the DVR shares make for a good investment at this juncture. Note that the DVR does not entitle investors to voting rights, but pays 5 per cent more dividend than the main stock.

Even as truck, bus and car sales went through a rough patch domestically, the JLR business kept Tata Motors firmly on the wheel.

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Tata Motors Domestic weakness, JLR strong; Hold :: Anand Rathi

Tata Motors
Domestic weakness, JLR strong; Hold
Key takeaways
3Q results likely to be good. For 3QFY14, we expect Tata Motors’
consolidated profits to register 90.3% yoy growth, chiefly following the good
performance at JLR. The Indian operations are, however, expected to
continue to be a drag due to the slump in CV sales and lower PV sales. We
expect consolidated sales to grow 31.8% yoy to `607.7bn, with a 15.5%
EBITDA margin and 90.3% yoy profit growth, to `34.3bn.
Standalone numbers to disappoint. Following a sharp volume drop in
3QFY14, on the back of incrementally worse demand environment vis-a-vis
1H, we expect losses to sustain. We expect EBITDA margin at 0.5% and
losses at `6.5bn.
JLR to be the key growth driver. JLR’s 3Q volumes are estimated to have
grown 19.6%. Unlike FY13 however, Jaguar is the key growth driver, not
Land Rover. Backed by good volume growth, we expect JLR to report 32.7%
yoy revenue growth, to £5bn. Our EBITDA margin expectation is 16.6% (up
260bps yoy), with 71.2% growth in profit to £443m (net profit margin of
8.8%, which is up 200bps yoy).
Our take. The cyclical M&H CV slowdown would continue to heap
pressure on Indian operations. Other divisions too are shifting to a lower
trajectory. The demand context for M&H CVs in 1HFY14 has been
challenging. Better performance in the standalone operations is likely only in
FY15. For JLR, good volume growth and continued demand are the clearest
positives at present, with the margin expected to improve ~180bps in FY14.
We currently have a Hold recommendation. Our target is `402, based on
Mar’15 estimates (`362 for JLR, `40 as the value of the India operations and
other investments and subsidiaries). Risks. Downside: Dip in Chinese
demand, negative surprises at JLR; Upside: Better M&H CV and car demand.

Sizzling Stocks: Prestige Estates Projects, Tata Motors :: Business Line

 

Consider a strategy with Tata Motors stock, DVR :: Business Line

Investment Focus - Tata Motors DVR: Buy :: Business Line

Goldman Sachs, Buy Tata Motors: JLR’s product cycle roars towards inflection; add to Conviction List

Buy
Tata Motors (TAMO.BO)
Return Potential: 27% Equity Research
JLR’s product cycle roars towards inflection; add to Conviction List
Source of opportunity
We add Tata Motors to our Conviction Buy List with a revised 12-m TP of
Rs368. We believe JLR is in a decisive phase of its multi-year product cycle,
as its average model age converges with European rivals over FY14E-FY15E
(currently 40% older), and its strongest brands get repositioned on an
innovative new aluminum platform. Our recent visit to its plants further
reinforced our view of a company which is rapidly transforming its
operations to support the step up in its product cycle. We revise our FY14EFY16E EPS by -6% to +2% (mainly driven by weakness in India earnings)
and are about 20% above Bloomberg consensus on FY14E-FY15E EPS.
Catalyst
We see three key catalysts – 1) Improving market confidence on cash flow
and EBIT margin sustainability over the next few quarters, as JLR reaps the
benefits of new models and an improving mix. We forecast consolidated
PBT to see a 30% CAGR over FY13-FY15E. 2) New product introductions or
announcements over next 12 months, such as new aluminum Discovery
and new variants of Range Rover and Evoque. 3) Significant phase of
annual product restocking in 2HFY14E, with improving deliveries to key
markets such UK and China, with the ramp-up in new Range Rover Sport.
Valuation
We raise our 12-m SOTP-based TP to Rs368 (from Rs361) based on revised
earnings and rolling forward to FY15E. Tata Motors is trading at over 20%
discount to global peers on Director’s Cut, and appears to be close to the
historical trough on BMW’s EV/DACF trading range. We also believe that the
current stock price arguably reflects the worst case for the parent India
business. Further, we note that its DVRs are currently trading at 48%
discount to the common stock.
Key risks
1) Higher cyclical pressure on the Indian truck demand front; 2) Higher fixed
costs from product launches; and 3) Stricter environmental regulations.
INVESTMENT LIST MEMBERSHIP
Asia Pacific Buy List
Asia Pacific Conviction Buy List

Goldman Sachs, Asia: Conviction List Update - Tata Motors, Bajaj

Asia: Conviction List Update
Equity Research
Our best stock ideas in Asia
Add Trade Me, TMSC and Tata Motors; Remove Bajaj Auto
Trade Me: On July 23, we added Neutral rated Trade Me to our ANZ
Conviction List (ANZ CL) given the company’s structural migration to
online media from print classified businesses; solid 2H13 growth; and
undemanding valuations.
TMSC: On July 24, we added the stock to our Asia ex-Japan Conviction
List (AEJ CL) as we believe its recent share price correction is overdone.
We expect higher capex, new launches, and a cyclical recovery to underpin
share price performance.
Tata Motors: On July 29, we added the stock to our AEJ CL on the back of
a strong upcoming multi-year product cycle, which could drive solid
earnings expansion.
Bajaj Auto: On July 29, we removed Bajaj Auto from the AEJ CL as we
replaced the stock with Tata Motors.
CL performance
For the period between July 22 and July 29, AEJ CL generated -0.2% alpha
hedged with MSCI AEJ and currently consists of 44 stocks; the Japan CL
generated +1.8% alpha hedged with TOPIX and consists of 16 stocks; the
ANZ CL generated -0.4% alpha hedged with ASX200 Accumulation Index
and consists of 14 stocks.
Director of Research (DOR) Asia Focus List
For the period between July 22 and July 29, Focus List alpha hedged with
the MSCI Asia Pacific index was +2.0% (ytd: -13.8%). There were no
changes during the periods.
Our Focus List consists of the following 8 Buy-rated CL stocks:
AIA Group, Anhui Conch (H), China Eastern Airlines (H), HCL Technologies,
Hyundai Development, Lonking Holdings, Ping An (A), and Sumitomo
Mitsui Financial Group.

Tata Motors: 4Q Results Review: JLR margins at 16.9% (close to record levels) surprise positively, product launches to drive growth::

Tata Motors 4Q FY13 results were ahead of estimates as the consolidated PAT
came in at Rs39B (-37% y/y), ahead of estimates. The variance was driven by JLR
–as EBITDA margins came in at 16.9% (close to record levels), driven by the
ramp up of the new Range Rover. The India business loss was largely in line at
–Rs.3.1B (vs. –Rs.4.5B q/q). We reiterate our OW stance on the stock – we
believe that growth at JLR will be driven by new product launches, including the
Range Rover, the RR Sport and the F Type.