ICICI Direct recommended hold rating on Tata Motors with a target price of Rs 115 in its research report dated August 03, 2020.
ICICI Direct's research report on Tata Motors
Tata Motors (TML) reported a muted performance in Q1FY21. Consolidated net sales were at Rs 31,983 crore, down 48% YoY (India down 80%, JLR down 44%) tracking 81.5% YoY volume decline in standalone and 45% YoY volume decline at JLR operations. Reported EBITDA margins were at 2.6%, down 330 bps QoQ amid 125 bps sequential dip in JLR margins to 3.5%. Consequent consolidated loss after tax was at Rs 8,444 crore, with JLR PBT loss at £413 million and standalone loss at Rs 2,191 crore.
We value TML at Rs 115 on SOTP basis i.e. 10x & 3.5x EV/EBITDA (FY22E) to TML standalone business & JLR, respectively, retaining our HOLD rating on the stock.
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