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Last Updated : Feb 27, 2017 10:29 AM IST | Source: Moneycontrol.com

Hold Tata Motors; target of Rs 500: Axis Direct

Axis Direct recommended hold rating on Tata Motors with a target price of Rs 500 in its research report dated February 21, 2017.

 
 
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Axis Direct's research report on Tata Motors


JLR’s EBITDA was a 20% miss. Margin was 10% vs. estimate of 14%. While some cost pressures were higher than expected (Discovery run-down), the heartbreak stemmed from the unfavorable hedge book in the wake of positive currency (GBP depreciation vs. the USD). To recap, JLR hedges 80/60/40/30/15% of its 1/2/3/4/5 year forward revenue.


Outlook


Besides the positive model cycle, our optimism stemmed from positive currency as well. If heavy hedging losses could continue for another few quarters, we’d prefer remaining on the sidelines till the hedge rates get favorable. For now, we have lowered FY18 EBITDA estimates by 12% and downgraded the stock to HOLD with revised TP Rs 500.


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First Published on Feb 27, 2017 10:29 am
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