Feb 19, 2013, 03.11 PM | Source: Moneycontrol.com
Angel Broking is bullish on Tata Motors and has recommended accumulate rating on the stock with a target of Rs 326 in its February 14, 2013 research report.
, Angel Broking |
“Tata Motors (TTMT)’ adjusted net profit at Rs1,801cr was significantly lower-than-expected, due to a higher depreciation expense (up 29.8percent qoq), forex loss of Rs174cr and a higher tax rate (at 38.7percent vs 32percent in 2QFY2013). The depreciation expense was higher due to the amortization of product development expenses on the new Range Rover.”
“The top-line at Rs46,090cr too was lower-than-expected due to unfavorable mix at Jaguar and Land Rover (JLR) and in standalone operations which resulted in a sequential decline in net average realization. JLR’s top-line (up 15.7percent qoq) was impacted mainly due to 5.5percent qoq decline in net average realization led by unfavorable product-mix (higher share of Evoque and Freelander). The standalone top-line (down 14.8percent qoq) was lower on account of inferior productmix and higher discounts leading to a 7.9percent qoq decline in net average realization. Sequentially, the consolidated EBITDA margin stood flat at 12.3percent (lower than our estimates of 12.8percent).”
“We retain our positive view on JLR and expect a ~15percent volume CAGR over FY2012-14E driven by Evoque, new product launches (Range Rover, Range Rover Sport, XF Sportbrake, XF AWD and smaller engine variants of the XF and XJ) and continuous ramp-up in China. Further, favorable market and product-mix and stable commodity prices will help mitigate raw-material cost pressures. We maintain our accumulate rating on the stock with a sum-of-the-parts (SOTP) target price of Rs326,” says Angel Broking research report.
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