June 15, 2016 / 17:59 IST
Prabhudas Lilladher's research report on Tata Motors
We met the Investor Relations representative of Tata Motors and came away convinced with our positive outlook for TTMT and JLR reinforced. JLR’s product launches in FY16 have materialised into good volumes and we expect FY17 would reap the benefits from these launches. Over FY17‐18, four new products have been planned by JLR, of which, the new Discovery and new Range Rover appear most interesting. India operations would witness positives from the improved M&H CV demand and recovery from lows of LCV demand.
However, we believe that the car portfolio is likely to be an underperformer. Near‐term concerns also arise from the possibility of Brexit and its possible adverse implications for JLR, although the exact quantum cannot be gauged by the company. We maintain “BUY” with a target price of Rs503. At the current market price, the stock is trading at 9.3x FY17E and 7.6x FY18E earnings.
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