Accumulate Tata Motors; target Rs 326: Angel Broking
Angel Broking is bullish on Tata Motors and has recommended accumulate rating on the stock with a target price of Rs 326 in its March 13, 2013 research report.
March 14, 2013 / 14:34 IST
Angel Broking is bullish on Tata Motors and has recommended accumulate rating on the stock with a target price of Rs 326 in its March 13, 2013 research report.
"Tata Motors, Jaguar and Land Rover (JLR) recorded a healthy 10% yoy (down 7% mom) growth in overall wholesale volumes to 35,485 units for the month of February 2013. However, the same were slightly below our expectation of 36,500 units. The growth during the month was impacted largely due to the week-long holidays in China on account of the New Year (in 2012, the New Year holidays had fallen in the month of January) which affected deliveries.Jaguar posted a robust 68% yoy (10.3% mom) growth in sales, which was ahead of our estimate, led by the model year 2013 products - XF Sportbrake, XF AWD and smaller engine variants of XF and XJ.Land Rover registered a modest sales growth of 1.3% yoy (10.6% mom) largely due to the holidays in China which impacted overall deliveries. While deliveries of Evoque stood at ~10,800 units (down 8.5% mom), the new Range Rover dispatches stood at ~4,000 units (flat mom).The volume growth of other global luxury carmakers, in February, was modest as well, primarily on account of the week-long Chinese New Year holidays. Meanwhile, in the US, the growth traction for luxury cars continued to remain strong.Audi registered a modest volume growth of 3.2% yoy (down 1.6% mom) as volumes in China registered a decline of 3.5% yoy. However, the US volumes grew strongly by 27.5% yoy. The company continues to witness strong demand for its mid-size model lines A4, A5 and Q5.BMW recorded a healthy volume growth of 7% yoy (7.1% mom) driven by strong demand for X1 and 3 series. While volumes grew 6.6% in Europe, China posted a volume growth of 2.3% yoy.Mercedes registered a decline of 5.8% yoy (5.1% mom) in its volumes, primarily on account of 47.2% yoy decline in China volumes. The US volumes however, posted a strong growth of 21.9% yoy during the month.Outlook and valuation: We retain our positive view on JLR and expect an ~15% volume CAGR over FY2012-14 driven by Evoque and new product launches (Range Rover, Range Rover Sport, Jaguar XF Sportbrake and AWD and smaller engine variants of XF and XJ models). Further, a favorable market and product-mix and stable commodity prices will help mitigate raw-material cost pressures. We maintain our Accumulate rating on Tata Motors with a sum-of-the-parts (SOTP) target price of Rs 326," says Angel Broking research report.Quarterly Shifts by Morgan Stanley Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
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