Buy Tata Motors; target Rs 355: Angel Broking
Brokerage house Angel Broking is bullish on Tata Motors and has recommended 'Buy' rating on the stock with a target price of Rs 355 in its research report dated August 22, 2013.
August 26, 2013 / 15:53 IST
Angel Broking's report on Tata Motors
Jaguar and Land Rover (JLR) recorded an extremely strong volume growth of 30.6 percent yoy (15.1 percent mom) for July 2013 to 35,162 units, which was ahead of our expectations of 32,500 units. The growth was led by the strong performance of Jaguar and Land Rover models on the back of success of new launches and easing of capacity constraints.Jaguar continued its impressive run, posting a growth of 76.5 percent yoy (16 percent mom) to 7,174 units. The same was driven by growth in the F-type and XF models led by the introduction of the Sportbrake, AWD and smaller engine variants.Land Rover sales too recorded a robust growth of 22.4 percent yoy (14.9 percent mom) to 27,988 units. Nevertheless, phasing out of the old Range Rover Sport model impacted growth to some extent.The sales of global luxury car manufacturers continue to remain buoyant, aided by strong growth in the Asia/Pacific and North America regions.Audi registered a strong growth of 9.8 percent yoy driven by the strong performance of the A3 family and Q3 and Q5 SUV models. According to the company, demand in Asia Pacific (including China) and North America region continues to remain strong, even as the environment remains challenging in Europe.BMW posted highest ever July sales, recording a strong growth of 13.5 percent yoy led by continued momentum in 3, X1 and X3 series models and also due to strong demand from Asia Pacific and North America.Mercedes-Benz registered a robust growth of 20 percent yoy driven by success of its new models including the E Class and compact models. Geographically, Asia Pacific, North America and the Europe region recorded a strong growth of 26.9 percent, 21.6 percent and 15.5 percent yoy respectively.Outlook and valuation: We expect JLR to sustain its strong performance going ahead, driven by continued momentum in the global luxury vehicle market and aided further by the strong product launch pipeline and the success of the models launched in 4QFY2013. We expect JLR volumes to grow at ~13 percent CAGR during FY2013-15E and PAT to grow at ~15 percent CAGR during the same period. We retain our positive view and Buy rating on Tata Motors with an SOTP based target price of Rs 355," says Angel Broking 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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