Tata Motors’ (TML) Q1FY17 results were below our estimates. Consolidated revenues were at | 65,895 crore (up 9.1% YoY), below our estimate of | 70,245 crore. JLR revenues came in at £5461 million (mn) (up 9% YoY), came in lower than our estimate of £5815 mn mainly on account of lower than estimated volumes. JLR wholesale volumes were at 134,334 units (up 17.4%YoY) vs. our estimate of 143,094 units. Standalone revenues were at | 10,320 crore (up 11% YoY) vs. our estimate of | 10,375 crore. The marginal miss on estimates was on account of lower than estimated ASP

Consolidated EBITDA margins at 12.9% (vs. our estimate of 14.8%) were impacted by JLR’s performance. JLR’s reported EBITDA margin for Q1FY17 was at 12.3% (down 410 bps YoY, 390 bps QoQ). However there was an adverse forex impact of £207 million, including revaluation of £84 million, mainly euro payables resulting from depreciation in pound following Brexit vote. EBITDA margins excluding FX revaluation were at 14%.Standalone margins at 6.7% (up 195 bps YoY) were marginally above our estimates of 6.6% . Consequently, consolidated PAT came in at | 2260 crore (vs. estimate of | 3120 crore). JLR reported PAT of £304 mn vs. our estimate of £444 mn. The miss on PAT was mainly attributable to lower than estimated revenues & adverse impact of forex loss of £207 million. Chery JV share of PAT at £45m (vs. estimate at ~£60 mn vs. £49 mn in Q4FY16 vs. £6 mn loss in Q1FY16. Arrive at a target price of | 660 with BUY rating.