Tata Motors Ltd. share price target

JLR's China volumes on the mend; Brexit muddies waters! JLR volumes have exhibited resilience in recent months, as a favourable base coincides with improvement in China business. Q2FY20 volumes at 1.35 lakh were up 3% YoY and 13% QoQ. Retail volumes (1.29 lakh units) were flattish on a yearly as well as sequential basis (China up 24% YoY, 8% QoQ). These prints represent tangible progress for JLR given the 15 consecutive months of contraction in overall Chinese auto industry volumes. However, prevailing uncertainty over Brexit negotiations would over the...

26 October 2019 strong, with the EBITDA margin at 13.8% (est. of 7.7%) one of the highest in four years. This reflects (a) a recovery in China and resilient US/EU, (b) a better mix, (c) Project Charge delivery, (d) lower D&A; and (e) favorable FX. PBT before EO stood at GBP166m (est. FCF was negative at GBP64m (v/s GBP623m in 2QFY19). business was impacted by inventory reduction, resulting in retails coming in higher by ~27k than wholesales in 2Q. India business disappointed with an EBITDA loss of ~INR1.7b (est. of +INR2.2b) due to write-off of ~INR2.33b in PV and operating deleverage.

Acceleration in Project Chage'savings drive JLR margin performance. TTMT's 2QFY20 results were better than expectations as JLR margins were at 13.8% (PLe: 8%) led by favorable mix, forex and project charge related cost savings. However, this was offset by a sharp decline in S/A profitability with EBITDA margins turning negative at 1.7% (18 quarter low, PLe: 5%) and loss of Rs13.4bn (PLe loss of Rs3.6bn)....

10 October 2019 Automobiles JLRs wholesale volumes were flat YoY (+34% MoM) at 53k units (our 4% YoY). JLRs retail volumes declined by ~0.5% YoY, as the recovery in China (+18% YoY) was offset by the decline in the UK (-6.5% YoY) and RoW (-13% YoY). China witnessed the third consecutive month of a recovery in volumes. Jaguars retail volumes declined ~15% YoY, led by a decrease in sales for all models, except I-Pace. LRs retail volumes grew ~7% YoY, driven by the ramp-up of new Evoque (+51%), RR (+11%) and RR Sport (+31%). Against challenging market headwinds, for the third consecutive month we have achieved double-digit growth in China, benefitting from our local turnaround plan and performing ahead of the broader market. Despite these negative market trends, Land Rover sales saw year-on-year growth in the quarter. A comprehensively updated and well-received new Discovery Sport will support this positive development in the months to come.

11 September 2019 Automobiles JLRs wholesale volumes declined 7.1% YoY (-5.2% MoM) to 39.6k units (our 4.7k units. JLRs retail volumes declined ~7% YoY with de-growth across markets (marginal in Europe). However, China sales grew ~17% YoY to 8.8k units. Jaguars retail volumes declined ~18% YoY, led by lower sales in models like XF, XK/E-pace and Others/F-types. XJ and I-Pace sales were higher at 291 and 903 units, respectively, in the month. LRs retail volumes declined marginally by 1.4% YoY owing to lower sales growth for Discovery, Freelander, RR and RR Velar. RR Evoque sales were up ~51% YoY to 5.4k units. the global market remains challenging, we have seen a second month of consecutive growth in China.

Q1FY20 consolidated revenue declined by 7.7% YoY on weaker sales volumes (-20.8% YoY). Standalone TML (S) revenue dropped by 19.9% YoY and Jaguar Land Rover (JLR) revenue was down by 5.4% YoY. Adj. EBIT loss came in at Rs. 1,562cr vs. Rs. 548cr loss in Q1FY19, primarily on negative operating leverage from lower wholesale business. Adj. EBIT margin dropped 170bps YoY to -2.5%. Adj. loss after taxes stood at Rs. 3,590cr vs Rs. 1,902cr in Q1FY19 (Adj. loss per share at Rs. 10.6 vs. Rs. 5.6 in Q1FY19)....

Turnaround 2.0 intensified. Focused on doing the right things for long term success. Commercial Vehicles (CV) and Passenger Vehicles (PV) continues to focus on retails given challenging market backdrop. CV Wholesale (Dom) was down 16.0% while Retail (Dom)...

JLR base effect kicks in, India CV business- cyclicality to prevail! Thus far, Tata Motors' JLR brand has been suffering from a prolonged softness in sales volumes, with the China geography proving to be a particular pain point. Total JLR volumes for Q1FY20 were at 1.18 lakh units, down ~10% YoY. Encouragingly, however, in June 2019, JLR reported a volume growth of 15% YoY, albeit on a lower base. With base effect kicking in at JLR, going forward, we expect its volume growth to be in positive territory. However, it will still be marred by hovering concerns over Brexit...

Consol. revenue declined 8% YoY to INR614.7b (our estimate: INR564.9b). TTMT reported adj. net loss of INR36b (our estimate: loss of INR11.8b). JLR higher VME, op. deleverage impact margin: Net revenue declined 3% YoY to GBP5.1b, implying realization growth of 1.5% YoY to GBP48.7k (our estimate: GBP47.2k). EBIT margin was at -5.5% (our estimate: -4%), implying a contraction of 180bp YoY due to lower volumes and higher...

11 July 2019 Automobiles JLRs wholesale volumes grew 15% YoY (+8.3% MoM) to 43.2k units (our JLRs retail volumes declined ~10% YoY in Jun19, led by de-growth across markets (except UK), particularly in China (-12.3%) and Europe (-11.7%). Jaguars retail volumes fell ~8.5% YoY, led by a decline in sales in models like XF, F-pace and XK/E-pace, while I-Pace sales came in at ~1.6k units. LRs retail volume declined ~10% YoY due to lower sales across models, except RR Evoque (+3.4% YoY to 7k units). challenging conditions continue to impact other regions, we were pleased to see sales return to growth in the UK, where we are outperforming the market aided by higher sales of the new Range Rover Evoque, Land Rover Discovery, Jaguar I-PACE and the new Jaguar XE. At Land Rover, the new Range Rover Evoque luxury compact SUV continues to strengthen its global sales performance following its recent debut.