Motilal Oswal is bullish on Tata Motors has recommended buy rating on the stock with a target price of Rs 542 in its research report dated September 11, 2017.
Motilal Oswal's research report on Tata Motors
We hosted management of Tata Motors (TTMT) at our 13 th Motilal Oswal Annual Global Investor Conference (AGIC). The company’s commentary and the available levers vindicate our view that the worst of operating performance is behind us. We are also now more confident about an impending turnaround in the operational and financial performance of JLR and India business. Key takeaways:
OutlookJLR is poised for a sharp recovery, driven by its (a) promising product pipeline, (b) beneficial Fx movement, (c) conducive mix, (d) favorable operating leverage and (e) improved FCF conversion. India business is interestingly positioned, with several levers to drive turnaround for both PVs and CVs. We estimate ~74% PAT CAGR over FY17 -19 (albeit on a low base, after declining at ~33% CAGR over FY15 -17). The stock trades at 16.7x/6.3x FY18E/FY19E consolidated EPS. We maintain Buy with a target price of INR 542 (June 20 19 SOTP - based).
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