Tata Motors Ltd. share price target

Current tax expense for the quarter jumped 22.7% to Rs 675.45 crore as against Rs 550.33 crore in Q3 December 2019. For Jaguar Land Rover (JLR), the quarter reflected strong sequential recovery in retails in all the markets except UK where Q3 remains seasonally lower. The business achieved 6.7% EBIT margin and strong positive free cash flows of 0.6b reflecting...

As supply chain issues in various markets get resolved, we expect JLR revenues to pick up gradually. Also, vaccination drive progress in India enabling re-opening of schools, offices could increase demand for commercial vehicles adding to overall demand. We reiterate our BUY...

We downgrade TTMT to reduce (from Hold) with TP of Rs231 (v/s Rs172) as we feel the sharp rally in stock recently factors in benefits expected from softer Brexit norms and consolidated entity turnaround to profits. This is captured by forward valuations reaching 10 year LPA. Also Looking at peer valuations, BMW and Daimler are trading at 0.2x EV/ Sales and 3-4x EV/EBIT with better growth and balance sheet. With the weak financial performance in...

India PV performance in 9MFY21 has defied the industry (TML volumes up 39% vs. 16% industry decline) translating into 300 bps market share gain and healthy profitability at EBITDA level (Q3FY21 EBITDA was highest in 10 quarters). Excellent response to the Altroz, Harrier and New Forever' portfolio along with upcoming Safari, Hornbill launches places PV business in good stead. CV segment is also recovering fast, aided by return of infra and mining demand in trucks and LCV resilience. We believe the domestic CV industry has turned a corner (~2 years of cyclical downturn nearly...

Domestic auto industry volumes have been on a steady mend in the months post lifting of lockdown restrictions. Manufacturing and distribution activities have been getting ramped up gradually since June 2020, in step with the rest of the economy. However, the impact of the pandemic on the supply chain continues to inhibit a complete return to production normalcy. Nevertheless, most automotive industry segments have reported successive improvement in offtake throughout June-November 2020 (Exhibit 1) on the back of (i) initial bounce provided by pent-up aspect,...

Tata Motors records loss of Rs 314 cr in July-Sept quarter, misses' estimates Net sales during the quarter declined 18.4% year-on-year (YoY) to Rs 52,839.02 crore. Finance costs increased by Rs 114 crore to Rs 1,950 crore during Q2 FY21 compared with the prior year due to higher gross borrowings as compared to Q2 FY20....

The company is preparing for deal' (base case) as well as no-deal' Brexit outcome. Increase in production stock (in UK, Slovakia) and stock of aftermarket parts are expected to help mitigate enhanced procedural complexity. A no-deal outcome would lead to tariffs on UK-EU trade but a weaker Pound Sterling would offset some of the damage. On the controllables side, however, Project Charge+ continues to deliver, with 0.6 savings in the quarter taking total savings this year to 1.8 billion with 0.7 million remaining to be achieved now. A similar India programme also...

2QFY21 marked initial signs of volume recovery, the benefit of mix, and costcutting initiatives coming together. This coupled with normalcy in working capital as well as tight control on capex resulted in FCF turning positive. JLR's near-term volumes may be at risk from a potential second wave of COVID. However, mix improvement and tight cost/capex control would drive sharp improvement in operating performance and debt reduction. We upgrade our FY22E EPS by 13% to factor in lower tax in JLR (reversal of deferred tax). Maintain Buy, with TP of INR230 (Sep'22 SOTP)....

We recommend a BUY on Tata Motors with a Target Price of Rs 150, an upside of ~10% from CMP of Rs. 136 and Stop Loss Rs 131.