Motilal Oswal's research report on TATA Motors
TATA Motors (TTMT)’s 4QFY23 result was a strong beat across businesses resulting in consol. PAT of INR56b (v/s est. of INR27b). Consol. net debt (auto) reduced INR138b QoQ to INR437b. With expected JLR wholesales of ~400k in FY24, management is targeting >6% EBIT margin, FCF of GBP2b and to reduce net debt to <GBP1b. India businesses are focused on margin expansions as volume growth is likely to moderate in FY24.
Outlook
We upgrade our consol. EPS by 13%/6% for FY24E/25E to factor in: a) JLR’s volume ramp up as well as moderation in certain costs, and b) margin improvements in India businesses. Reiterate BUY with a Mar’25 SOTP-based TP of INR590.
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