Tata Motors Limited    
11 Aug 2017
380.10
1.81%
Year low in share price for Tata Motors indicates opportunity for analysts click to expand

Tata Motors weak Q1 results and missed estimates has caused the company's share price to fall sharply, and this has got analysts excited: HDFC Securities, Motilal Oswal and Prabhudas Lilladar all have issued buy calls on the stock with high upside estimates. Analysts estimate that the weak Q1 performance this financial year is a one-off. 

Lower JLR margins as well as lower volumes, higher costs for launches and rise in employee expenses all impacted results. But analysts say the things to watch are: 1) an improving model mix with a ramp-up in sales of new launches. The company has planned 6 new product launches in its M&HCV portfolio 2) Capital expenditure for JLR to reduce post the Slovakia plant going live 3) EBITDA margins rising back over 10% in the longer-term 4) GST transition and production delays likely resolved going forward.

Tata Motors management has cautioned that margin pressure will continue in FY18, keeping EBITDA in the range of 8-10% in the medium term. 

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ICICI Securities Limited decreased Buy price target of Tata Motors Limited to 490.0 on 22 Aug, 2017.
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