Company Information
Tata Motors Limited is India’s largest automaker which has also operations in UK, South Korea, Thailand and Spain through subsidiaries and associates. Major among them are Jaguar Land Rover (UK) (JLR). It is India’s market leader in commercial vehicles and second largest in passenger vehicles. It is also the world’s fourth largest truck manufacturer and the second largest bus manufacturer.
Superiorities of the stock
- Domestic Commercial Vehicle space remains upbeat – on robust macro-economic environment, strong IIP growth and consequent rise in freight traffic.
- JLR performance to improve considerably: led by new launches from both Jaguar (XJ) and Land Rover (Evoque), strong demand from China, weakness in GBP and improvement in margins due to operating leverage and efficient cost management.
- Nano to improve performance in PV segment as production ramps up in the new Sanand plant.
- Much cleaner balance sheet: Considerable improvement in consolidated balance sheet profile with net D/E at 2.1x as on March, 2010 as against ~6x in September, 2009.
Key Delta Triggers
- Higher than expected increase in CV demand on account of robust IIP growth.
- Better than expected traction in JLR volumes and sustainable improvement in JLR’s profitability, thereby boosting consolidated profitability.
Share Data (July 2010)
| Price | Rs. 838/- |
| BSE Sensex | 18131 |
| Reuters code | TELC.BO |
| Bloomberg code | TTMT IN |
| Market cap. (US$mn) | 9049 |
| 6M avg. daily turnover (US$mn) | 89.3 |
| Issued shares (mn) | 506 |
| Performance (%) | 1M | 3M | 12M |
| Absolute | 6 | (1) | 146 |
| Relative | 4 | (3) | 107 |
Valuation ratios
| Year upto 31 Mar. | FY11E | FY12E |
| EPS (Rs.) | 35.7 | 44.2 |
| +/- (%) | 50.3 | 23.8 |
| PER (x) | 23.5 | 19.0 |
| PBV (x) | 3.3 | 3.0 |
| Dividend/Yield (%) | 1.2 | 1.2 |
| EV/Sales (x) | 1.4 | 1.2 |
| EV/EBITDA (x) | 11.8 | 9.8 |
Major shareholders (%)
| Promoters | 37 |
| FIIs | 22 |
| MF’s | 3 |
| BFSI’s | 16 |
| Public & Others | 22 |