Sell Tata Motors Passenger Vehicles; target of Rs 312: Motilal Oswal

Motilal Oswal's research report on Tata Motors Passenger Vehicles

Tata Motors Passenger Vehicles Ltd (TMPV) delivered one of its worst financial performance in recent times recording a consolidated loss of INR 55b largely due to significantly weak performance at JLR (EBITDA margin at 1.6% Vs our estimate of 7%) even as India PV business performance was largely in line.

Outlook

We initiate coverage on the recently demerged India PV business with a Sell rating and a SoTP based TP of INR 312 per share. We lower our target multiple for JLR to 2x EV / EBITDA from 2.5x earlier to reflect the multiple headwinds it is currently facing. We continue to value the India PV business at 15 x EV/EBITDA.