Accumulate Tata Motors; target of Rs 344: Dolat Capital
Dolat Capital is bullish on Tata Motors and has recommended 'Accumulate' rating on the stock with a price target of Rs 344 in its May 29, 2013 research report.
June 01, 2013 / 17:54 IST
Dolat Capital's research report on Tata Motors
"Tata Motors reported top-line revenue at Rs 560bn, up 10 percent YoY led by 18 percent YoY volume growth in JLR sales. The company sold ~116,300 JLR vehicles during the quarter. It had sold ~95,000 vehicles in 3QFY13. Domestic revenues were down ~32 percent due to ~30 percent decline in volumes.JLR operating margins at 16.9 percent, previous quarter was 14.0 percent: JLR reported operating margins at 16.9 percent. JLR EBIDTA stood at GBP856mn. Consolidated EBIDTA for the quarter was Rs 83.3bn, up 16 percent YoY. Consolidated margins stood at 14.9 percent compared to 13.3 percent reported in previous quarter. Domestic margins took a huge hit and the company reported margins at 3.6 percent.JLR PAT at 386mn pound: PAT for the quarter stood at 386mn pound. Consolidated PAT reported at Rs 38.1bn. EPS for the quarter was Rs 12.0. The company reported a loss of Rs 3121mn at the domestic level.China now constitutes 21 percent versus 17 percent of the total sales volume in FY12: Cash and financial deposits stood at GBP 2,847 mn. Gross Debt stood at GBP 2,167 mn. The YTD Capex & product development spend stood at GBP 2,048 mn.Valuation: Domestic operations continue to reel under pressure due to macro economic weakness. Stagnant freight rates with rising diesel prices have been a dampener. With the global scenario a little weak, we believe the company may come under some pressure to maintain its growth. However with the recent out-performance, and with the success of its new launches, we expect JLR’s revenue to grow at a CAGR of ~8 percent during FY13-15 period. Also, we expect the EBIDTA to grow at a CAGR of ~8 percent. The stock currently trades at 7.1xFY15E. We upgrade our EPS for FY15 from Rs 35/- to Rs 37/-. Accordingly we upgrade our target price from Rs 315/- to Rs 344/-. We maintain Accumulate," says Dolat Capital research report.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. 
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