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Last Updated : Jun 03, 2016 01:16 PM IST | Source: Moneycontrol.com

Analysts expect new models to aid Tata Motors' JLR FY17 growth

After JLR's May sales data, Macquarie, which has target of Rs 535 on the stock, says Tata Motors is its top pick in the India auto sector and is a Macquarie Marquee stock while JP Morgan has price target of Rs 485, which says Tata Motors' India business is benefitting from an improving macro environment.

 
 
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Moneycontrol Bureau


Tata Motors shares gained 2 percent intraday Friday. Foreign brokerages JP Morgan and Macquarie have maintained overweight and outperform rating on the stock, respectively as they expect new models launches to drive Jaguar Land Rover (JLR) growth in FY17.


After JLR's May sales data, Macquarie, which has target of Rs 535 on the stock, says Tata Motors is its top pick in the India auto sector and is a Macquarie Marquee stock while JP Morgan has price target of Rs 485, which says Tata Motors' India business is benefitting from an improving macro environment.

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With retaining buy rating, Nomura says a sharp decline in RR/RR-Sport remains a concern but plans to launch the new model RR by August-September 2016 should provide some respite. For FY17, it expects overall volumes to be up 14 percent YoY with 62 percent growth in Jaguar and 3 percent in Land Rover.


JLR reported 8 percent year-on-year growth in the US sales for May, driven by new launches at Jaguar that showed a solid 80 percent YoY growth while Land Rover sales declined 8 percent.


Jaguar launches XE compact luxury sedan and F-PACE compact luxury SUV. With less than a full month's sales, it sold 598 units of XE and 666 units of F-PACE while F-Type, XF and XJ sales declined sharply.


Weak Land Rover sales were due to lower retail inventory on certain models. RR, RR Sport and Evoque sales declined 31 percent, 7 percent & 16 percent in May, respectively, though it was partially offset by higher sales of the Discovery Sport and LR4.


In same month, other premium car makers like Audi reported 1.6 percent growth YoY in sales and Porsche 7.3 percent but BMW, Mercedes and Lexus sales declined 6.4 percent, 0.6 percent and 10 percent.


Nomura says there were two fewer selling days in May 2016 compared to last year, adjusted for which JLR's growth would have been higher at 17 percent YoY.

At 10:57 hours IST, the scrip of Tata Motors was quoting at Rs 455.65, up Rs 2.45, or 0.54 percent on Bombay Stock Exchange.

Posted by Sunil Shankar Matkar



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First Published on Jun 3, 2016 11:49 am
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