Buy Tata Motors; target of Rs 471: Motilal Oswal

Motilal Oswal's research report on Tata Motors

JLR's wholesale volumes grew 3.5% YoY (16.4% MoM) to 48.8k units (including China JV's 7k units) in May 2018. Jaguar volumes grew 21.1% YoY to 15.3k units (in-line) while Land Rover volumes declined 2.9% YoY to 33.5k units (in-line). JLR's retail volumes increased 6.1% YoY (6.9% MoM) to 48.3k units, as Jaguar retails grew 6.6% YoY (9.2% MoM) to 14.5k units, while LR retails increased 6% YoY (5.9% MoM) to 33.8k units.

Outlook

Although there has been an initial drop in sales, as customers weigh up what it means for them, all indications are that this will be temporary and the move mid-term will further strengthen demand."  The stock trades at 7.2/5.9x FY19E/20E consolidated EPS. Maintain Buy with a target price of INR471 (March 2020E SOTP-based).