Transcript
8/3/2019 Tata Motors Result Updated
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Please refer to important disclosures at the end of this report 1
Y/E March – Consolidated (` cr) 3QFY12 3QFY11 % chg (yoy) Angel est. % diff
Net sales 45,260 31,442 44.0 42,421 6.7
OPM (%) 15.1 14.3 81bp 11.8 329bp
Reported PAT 3,406 2,424 40.5 2,560 33.0
Source: Company, Angel Research
Stellar show at JLR drives overall performance: Tata Motors (TTMT) reported an
extremely strong set of results, driven by stellar performance at JLR. The company’s
top line grew by robust 44% yoy (25% qoq), led by 41.5% yoy (28.6% qoq) growth in
JLR sales, which were driven by a 36.7% yoy (26.9% qoq) jump in volumes and 3.1%
yoy (0.8% qoq) improvement in net average realization. The company’s operating
margin surprised positively and stood at 15.1% on account of better-than-expectedperformance at JLR (EBITDA margin at 18.2%), which benefitted from superior
product and geography mix, favorable forex and higher operating leverage. As a
result, net profit increased by strong 40.5% yoy (81.4% qoq) to ` 3,406cr.
Y/E March – Standalone (` cr) 3QFY12 3QFY11 % chg (yoy) Angel est. % diff
Net sales 13,338 11,520 15.8 14,242 (6.3)
OPM (%) 6.4 10.1 (376)bp 6.2 16bp
Reported PAT 174 410 (57.6) 282 (38.4)
Source: Company, Angel Research
Standalone performance under pressure: TTMT posted disappointing standalone
results on account of unfavorable product mix, higher marketing spends in the
passenger vehicle (PV) business and raw-material cost pressures. The top line reported
healthy 15.8% yoy (3% qoq) growth, driven by 21.5% yoy (10% qoq) growth in
volumes. Net average realization, however, declined by 4.8% yoy (6.4% qoq) due to
higher proportion of PVs in the total volume mix. Operating margin continued to be
under stress and declined by 376bp yoy to 6.4%, led by higher marketing spends and
commodity cost pressures. Hence, net profit declined by 57.6% yoy to ` 174cr.
Outlook and valuation: We have revised our consolidated earnings estimates
upwards by 19.5%/32.4% for FY2012/13 on account of better-than-expected JLR
performance during the quarter. We broadly retain our standalone earnings estimates
and increase our JLR estimates over FY2012/13, driven by the increase in our volume
and EBITDA margin estimates. We have increased JLR volume estimates by ~12% for
FY2013 and margin estimates for JLR by ~100bp in FY2013. At ` 286, the stock is
trading at 7.4x FY2013E earnings. We maintain Accumulate on the stock with anSOTP target price of `308.
Key financials (consolidated)Y/E March (` cr) FY2010 FY2011 FY2012E FY2013E
Net Sales 92,519 123,133 161,482 186,930
% chg 30.5 33.1 31.1 15.8
Net Profit 1,526 9,065 10,801 12,226
% chg - 494.0 19.2 13.2
EBITDA (%) 8.4 13.7 13.2 12.6
EPS (`) 5.3 28.6 34.0 38.5
P/E (x) 53.5 10.0 8.4 7.4
P/BV (x) 10.0 4.8 3.5 2.6
RoE (%) 21.3 65.8 47.5 40.0
RoCE (%) 8.9 24.7 27.9 27.9
EV/Sales (x) 1.2 0.9 0.7 0.6
EV/EBITDA (x) 14.8 6.6 5.2 4.7
Source: Company, Angel Research
ACCUMULATECMP ` 286
Target Price ` 308
Investment Period 12 Months
Stock Info
Sector
Bloomberg Code
Shareholding Pattern (%)
Promoters 35.0
MF / Banks / Indian Fls 14.9
FII / NRIs / OCBs 42.1
Indian Public / Others 8.0
Abs. (%) 3m 1yr 3yr
Sensex 7.8 (0.4) 88.9
Tata Motors 58.0 15.7 938.8
18,202
5,532
TAMO.BO
90,890
1.6
292/138
1,311,048
10
Market Cap ( ` cr)
Beta
52 Week High / Low
TTMT@IN
Face Value ( ` )
BSE Sensex
Nifty
Reuters Code
Automobile
Avg. Daily Volume
Yaresh Kothari
022-3935 7800 Ext: 6844yareshb.kothari@angelbroking.com
Tata Motors
Performance Highlights
3QFY2012 Result Update | Automobile
February 15, 2012
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Tata Motors | 3QFY2012 Result Update
2February 15, 2012
Exhibit 1: Quarterly performance (Standalone)
Y/E March (` cr) 3QFY12 3QFY11 yoy chg (%) 2QFY12 qoq chg (%) 9MFY12 9MFY11 yoy chg (%)
Net Sales 13,338 11,520 15.8 12,954 3.0 38,190 33,185 15.1
Consumption of RM 8,322 6,644 25.3 8,075 3.1 23,239 18,427 26.1(% of Sales) 62.4 57.7 62.3 60.9 55.5
Staff Costs 695 581 19.6 683 1.8 1,999 1,672 19.6
(% of Sales) 5.2 5.0 5.3 5.2 5.0
Purchases of TG 1,538 1,423 8.1 1,501 2.5 4,428 5,151 (14.0)
(% of Sales) 11.5 12.4 11.6 11.6 15.5
Other Expenses 1,931 1,703 13.4 1,822 6.0 5,832 4,516 29.1
(% of Sales) 14.5 14.8 14.1 15.3 13.6
Total Expenditure 12,486 10,351 20.6 12,081 3.4 35,498 29,766 19.3
EBITDA 852 1,168 (27.1) 873 (2.4) 2,691 3,419 (21.3)
EBITDA margin (%) 6.4 10.1 6.7 7.0 10.3
Interest 186 275 (32.3) 212 (12.3) 651 896 (27.3)
Depreciation 421 337 25.0 387 8.9 1,173 976 20.2
Other Income 25 5 362.3 57 (56.0) 197 152 29.6
PBT (excl. Extr. Items) 269 562 (52.0) 331 (18.5) 1,064 1,699 (37.4)
Exceptional Items 83 31 - 294 (72) 375 93 -
PBT (incl. Extr. Items) 186 531 (64.9) 37 410.2 689 1,606 (57.1)
(% of Sales) 1.4 4.6 0.3 1.8 4.8
Provision for Taxation 13 121 (89.6) (66) (119.1) 12 368 (96.7)
(% of PBT) 6.7 22.8 (179.5) (103.8) 1.7 22.9
Reported PAT 174 410 (57.6) 102 70.2 677 1,238 (45.3)
PATM 1.3 3.6 0.8 1.8 3.7
Equity capital (cr) 634.8 633.1 634.8 634.8 633.1
EPS (`) 2.7 6.5 (57.8) 1.6 70.2 10.7 19.6 (45.5)
Source: Company, Angel Research
Exhibit 2: Quarterly volume performance (Standalone)
Y/E March (units) 3QFY12 3QFY11 yoy chg (%) 2QFY12 qoq chg (%) 9MFY12 9MFY11 yoy chg (%)
M&HCV 53,982 50,883 6.1 54,334 (0.6) 157,431 149,616 5.2
LCV 89,636 74,677 20.0 89,960 (0.4) 256,629 201,844 27.1
Total Commercial Vehicles 143,618 125,560 14.4 144,294 (0.5) 414,060 351,460 17.8
Utility Vehicles 13,745 9,472 45.1 12,003 14.5 36,375 29,013 25.4
Cars 69,748 51,841 34.5 50,137 39.1 176,148 186,514 (5.6)
Total Passenger Vehicles 83,493 61,313 36.2 62,140 34.4 212,523 215,527 (1.4)
Exports (Inc Above ) 14,135 15,962 (11.4) 16,004 (11.7) 45,025 42,658 5.5
Total Sales 227,111 186,873 21.5 206,434 10.0 626,583 566,987 10.5
Source: Company, Angel Research
Standalone performance under pressure: On a standalone basis, the company’s
top line grew by healthy 15.8% yoy (3% qoq) to ` 13,338cr, driven by 21.5% yoy
(10% qoq) growth in volumes. Volume growth was led by strong 36.2% yoy (34.4%
qoq) growth in PV sales. Net average realization, however, declined by 4.8% yoy (6.4% qoq) due to higher proportion of PVs in the total volume mix.
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Tata Motors | 3QFY2012 Result Update
3February 15, 2012
Operating margin declined substantially by 376bp yoy (35bp qoq) to 6.4% due to
raw-material cost pressures, higher marketing spends in the passenger car
business and higher discounts. As a result, operating profit declined by 27.1% yoy
(2.4% qoq) to `
852cr. Reported net profit declined by 57.6% yoy to `
174cr, led by weak operating performance. TTMT reported forex loss of ` 83.3cr, which included
credit of ` 208.1cr as per change in accounting standards. Lower tax rate of 6.7%
also boosted standalone profits.
Exhibit 3: Strong volume growth led by PV sales
Source: Company, Angel Research
Exhibit 4: Net average down 4.8% yoy
Source: Company, Angel Research
Exhibit 5: EBITDA margin dips on input cost pressures
Source: Company, Angel Research
Exhibit 6: Net profit down 57.6% yoy
Source: Company, Angel Research
63.055.6
47.6
31.9
17.412.7
6.2 4.0
21.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
0
50,000
100,000
150,000
200,000
250,000
3 Q F Y 1 0
4 Q F Y 1 0
1 Q F Y 1 1
2 Q F Y 1 1
3 Q F Y 1 1
4 Q F Y 1 1
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
(%)(units) Total volume yoy growth (RHS)
16.2
13.4
10.4 9.5 9.3
6.1 7.6 8.2
(4.8)
(10.0)
(5.0)
0.0
5.0
10.0
15.0
20.0
520,000
530,000
540,000
550,000
560,000570,000
580,000
590,000
600,000
610,000
620,000
630,000
3 Q F Y 1 0
4 Q F Y 1 0
1 Q F Y 1 1
2 Q F Y 1 1
3 Q F Y 1 1
4 Q F Y 1 1
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
(%)( ` ) Net average realisation/unit yoy growth (RHS)
12.69.3 11.1 9.7 10.1 8.4 8.1 6.7 6.4
68.9 70.9 71.0 72.9 70.4 70.9 69.6 74.3 74.3
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
3 Q F Y 1 0
4 Q F Y 1 0
1 Q F Y 1 1
2 Q F Y 1 1
3 Q F Y 1 1
4 Q F Y 1 1
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
(%) EBITDA margin Raw material cost/sales
4.5
4.9
3.8 3.8 3.6 3.9
3.4
0.8
1.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0
100
200
300
400
500
600
700
3 Q F Y 1 0
4 Q F Y 1 0
1 Q F Y 1 1
2 Q F Y 1 1
3 Q F Y 1 1
4 Q F Y 1 1
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
(%)( ` cr) Net profit (LHS) Net profit margin (RHS)
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Tata Motors | 3QFY2012 Result Update
4February 15, 2012
Exhibit 7: Quarterly performance (Consolidated)
Y/E March (` cr) 3QFY12 3QFY11 yoy chg (%) 2QFY12 qoq chg (%) 9MFY12 9MFY11 yoy chg (%)
Net Sales 45,260 31,442 44.0 36,198 25.0 114,747 86,841 32.1
Consumption of RM 27,096 17,823 52.0 21,335 27.0 67,772 48,400 40.0(% of Sales) 59.9 56.7 58.9 59.1 42.2
Staff Costs 3,207 2,427 32.2 2,866 11.9 8,665 6,850 26.5
(% of Sales) 7.1 7.7 7.9 7.6 6.0
Purchase of Goods 2,899 2,419 19.8 2,804 3.4 8,296 7,339 13.0
(% of Sales) 6.4 7.7 7.7 7.2 6.4
Other Expenses 5,232 4,284 22.1 4,689 11.6 14,446 11,906 21.3
(% of Sales) 11.6 13.6 13.0 12.6 10.4
Total Expenditure 38,433 26,953 42.6 31,694 21.3 99,180 74,495 33.1
EBITDA 6,827 4,489 52.1 4,504 51.6 15,567 12,346 26.1
EBITDA margin (%) 15.1 14.3 12.4 13.6 14.2
Interest 577 499 15.5 525 9.9 1,868 1,592 17.3
Depreciation 1,616 1,239 30.4 1,331 21.4 4,090 3,345 22.3
Other Income 24 10 142.7 61 (60.5) 161 64 151.5
PBT (excl. Extr. Items) 4,658 2,760 68.7 2,709 72.0 9,770 7,472 30.7
Exceptional Items 164 33 439 660 (54)
PBT (incl. Extr. Items) 4,494 2,728 64.7 2,270 98.0 9,110 7,526 21.0
(% of Sales) 9.9 8.7 6.3 7.9 8.7
Provision for Taxation 1,071 319 235.9 363 195.0 1,786 928 92.5
(% of PBT) 23.8 11.7 16.0 49.0 19.6 12.3
PAT 3,423 2,409 42.1 1,907 79.5 7,324 6,598 11.0
PATM 7.6 7.7 5.3 6.4 7.6
Minority Interest 21 11 93.7 34 (37.5) 58 28 105.9
Associate Companies Profit 4 26(85.5) 4 (3.5) 17 67 (73.9)
PAT after MI 3,406 2,424 40.5 1,877 81.4 7,283 6,636 9.7
Equity shares (cr) 634.8 633.1 634.8 634.8 633.1
Reported EPS (`) 10.7 7.7 40.1 5.9 81.4 22.9 21.0 9.5
Source: Company, Angel Research
Consolidated performance
Stellar show at JLR drives overall performance: Consolidated top line registered
impressive 44% yoy (25% qoq) growth to ` 45,260cr, aided by 41.5% yoy (28.6%
qoq) growth in JLR revenue. JLR revenue was driven by a 36.7% yoy (26.9% qoq)
jump in volumes to 86,322units and 3.1% yoy (0.8% qoq) improvement in net
average realization. New launches like Jaguar XF 2.2 and Evoque led to strong
volume performance at JLR during the quarter. Volume growth continued to be
driven by growth in emerging markets, with China and Russia reporting 81% and
34% yoy growth, respectively.
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Tata Motors | 3QFY2012 Result Update
5February 15, 2012
Exhibit 8: Net sales up 44% yoy, aided by 41.5% jump in JLR revenue
Source: Company, Angel Research
On the operating front, margin surprised positively and stood at 15.1%, registering
an 81bp yoy and 264bp qoq expansion. Margin expansion was led by JLR, while
standalone operations continued to be under pressure. JLR’s EBITDA margin
expanded strongly by 260bp qoq to 18.2%, benefitting from improving product
and geography mix and favorable currency movement. Reported net profit,
therefore, posted strong 40.5% yoy (81.4% qoq) growth to ` 3,406cr. During
3QFY2012, there was forex credit of ` 660.6cr on account of change in accounting
standards (AS-11).
Exhibit 9: EBITDA margin surprises positively
Source: Company, Angel Research
Exhibit 10: Strong net profit growth of 40.5% yoy
Source: Company, Angel Research
47.1
84.7
65.0
36.5
20.7 23.7 24.1 25.8
44.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
3 Q F Y 1 0
4 Q F Y 1 0
1 Q F Y 1 1
2 Q F Y 1 1
3 Q F Y 1 1
4 Q F Y 1 1
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
(%)( ` cr) Net sales (LHS) Net sales growth (RHS)
11.4 10.914.2 13.9 14.3 12.5 12.6 12.4 15.1
67.1 65.2 63.4 64.6 64.7 65.2 65.7 67.2 66.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
3 Q
F Y 1 0
4 Q
F Y 1 0
1 Q
F Y 1 1
2 Q
F Y 1 1
3 Q
F Y 1 1
4 Q
F Y 1 1
1 Q
F Y 1 2
2 Q
F Y 1 2
3 Q
F Y 1 2
(%) EBITDA margin Raw material cost/sales
2.5
7.87.4
7.7 7.77.4
6.05.2
7.5
0.0
1.0
2.0
3.0
4.0
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9.0
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
3 Q
F Y 1 0
4 Q
F Y 1 0
1 Q
F Y 1 1
2 Q
F Y 1 1
3 Q
F Y 1 1
4 Q
F Y 1 1
1 Q
F Y 1 2
2 Q
F Y 1 2
3 Q
F Y 1 2
(%)( ` cr) Net profit (LHS) Net prof it margin (RHS)
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Tata Motors | 3QFY2012 Result Update
6February 15, 2012
Exhibit 11: Quarterly performance - JLR
Y/E March (GBP mn) 3QFY12 3QFY11 yoy chg (%) 2QFY12 qoq chg (%) 9MFY12 9MFY11 yoy chg (%)
Revenue 3,749 2,650 41.5 2,915 28.6 9,367 7,135 31.3
Raw-material cost 2,386 1,660 43.7 1,902 25.4 6,062 4,446 36.3Employee expenses 254 196 29.6 235 8.1 699 575 21.6
Other expenditure 427 298 43.3 324 31.8 1,081 909 18.9
Total expenditure 3,067 2,154 42.4 2,461 24.6 7,842 5,930 32.2
% of sales 81.8 81.3 0.5 84.4 (2.6) 83.7 83.1 0.7
EBITDA 682 496 37.5 454 50.2 1,525 1,205 26.6
% of sales 18.2 18.7 (0.5) 15.6 2.6 16.3 16.9 (0.6)
Other income - - - -
Product development expense 43 43 - 34 26.5 103 76 35.5
Depreciation 136 114 19.3 113 20.4 342 299 14.4
EBIT 503 339 48.4 307 63.8 1,080 830 30.1
Interest 8 19 (57.9) 31 (74.2) 60 22 172.7
PBT (pre-exceptional) 495 320 54.7 276 79.3 1,019 808 26.1
Exceptional item 14 (24.0) (158.3) (60.0) (123.3) (43.0) 8.0 (637.5)
PBT 509 296 72 216 135.6 976 816 19.6
% of sales 13.6 11.2 2.4 7.4 6.2 10.4 11.4 (1.0)
Taxes 116 7 1,557.1 44 163.6 191 42 354.8
% of PBT 22.8 2.4 20.4 20.4 2.4 19.6 5.1 14.4
PAT 393 289 36 172 128.5 785 774 1.4
Source: Company, Angel Research
Stellar JLR performance: JLR reported net sales of GBP 3,749mn, up by 41.5% yoy
(28.6% qoq), boosted by strong volume growth of 36.7% yoy and 3% yoy
improvement in net average realization. Gross margin increased by 160bp
sequentially, driven by increased net average realization, superior product mix and
lower raw-material costs.
While according to IFRS, EBITDA margin stood at 18.2%, up 260bp qoq, under
Indian GAAP EBITDA margin came in at 20.1%. This difference is due to GBP60mn
of benefit in Indian GAAP on account of forex losses on debt, which are expensed
under IFRS, while under Indian GAAP they are passed through the balance sheet.
Reported PAT grew by 36% yoy (128.5% qoq) to GBP393mn on better operating
performance and lower interest outgo.
Management expects JLR to sustain its volume traction, led by recent launches like
Evoque and Jaguar XF 2.2 and expanding dealer network and increasing
marketing efforts. During the quarter, Freelander volumes were impacted by shift
in production towards Evoque.
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Tata Motors | 3QFY2012 Result Update
7February 15, 2012
Exhibit 12: JLR’s quarterly performance
Source: Company, Angel Research
Exhibit 13: JLR’s performance – Region wise
Source: Company, Angel Research
Exhibit 14: Performance of subsidiaries
Key Subsidiaries (` cr) 3QFY2012 3QFY2011
Net sales EBITDA EBITDAM (%) Net profit Net sales EBITDA EBITDAM (%) Net profit
Tata Motor Finance 524 95 18.2 71 332 36 10.9 33
Tata Technologies 439 79 17.9 58 313 39 12.5 28
Tata Daewoo 705 32 4.5 (1) 659 25 3.8 (3)
TML Drivelines 174 106 60.9 61 146 81 55.7 42
Subsidiary Total 1,842 312 16.9 189 1,450 181 12.5 99
Source: Company, Angel Research
Outlook and valuation
We have revised our consolidated earnings estimates upwards by 19.5%/32.4%
for FY2012/13 on account better-than-expected JLR performance during the
quarter. We broadly retain our standalone earnings estimates and increase our JLR
estimates over FY2012/13, driven by the increase in our volume and EBITDA
margin estimates. We have increased JLR volume estimates by ~12% for FY2013
and margin estimates for JLR by ~100bp in FY2013.
Exhibit 15: Change in estimates (consolidated)
Y/E March Earlier estimates Revised estimates % chg
FY2012E FY2013E FY2012E FY2013E FY2012E FY2013E
Net sales (` cr) 144,712 162,452 161,482 186,930 11.6 15.1
OPM (%) 12.0 11.6 13.2 12.6 114bp 104bp
EPS (`) 28.5 29.1 34.0 38.5 19.5 32.4
Source: Company, Angel Research
At ` 286, the stock is trading at 7.4x and 4.7x FY2013E earnings and EV/EBITDA,
respectively. We maintain Accumulate on the stock with an SOTP target price of
`308. We have valued the domestic core business at ` 67/share, implying 10x
FY2013E earnings. Our embedded value of the subsidiaries and investments in
TTMT's books (including JLR) works out to ` 241/share. We have valued JLR at 7xFY2013E earnings, implying a ~30% discount to the average multiple of its peers.
13.4 10.913.9 14.1 11.9 11.9 12.6 13.2 13.0
41.946.1 45.2
42.346.4
55.1
50.752.4
65.3
0
10
20
30
40
50
60
70
3 Q F Y 1 0
4 Q F Y 1 0
1 Q F Y 1 1
2 Q F Y 1 1
3 Q F Y 1 1
4 Q F Y 1 1
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
('000 units) Jaguar Land Rover
0
5
10
15
20
25
3 Q F Y 1 0
4 Q F Y 1 0
1 Q F Y 1 1
2 Q F Y 1 1
3 Q F Y 1 1
4 Q F Y 1 1
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
('000 units) North America UK Europe Russia China Others
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Tata Motors | 3QFY2012 Result Update
8February 15, 2012
Exhibit 16: SOTP valuation
Particulars Parameter Value/Share (`)Standalone FY2013E (10x P/E) 67
JLR FY2013E (7x PAT) 223Key subsidiaries and others 18
Target price 308
Source: Company, Angel Research
Exhibit 17: JLR peer valuation
P/E (x) P/B (x) EV/EBITDA (x) P/Sales (x)
CY12E CY13E CY12E CY13E CY12E CY13E CY12E CY13E
Audi 11.1 9.5 2.1 1.9 2.7 2.4 0.7 0.6
BMW 9.6 9.1 1.5 1.3 7.6 7.5 0.6 0.6
Daimler 9.0 7.9 1.2 1.1 8.6 7.7 0.5 0.4
Volkswagen 6.9 6.1 0.9 0.8 6.1 5.5 0.4 0.3
Source: Bloomberg, Angel Research
Key downside risk to our estimates: Lower-than-expected growth in JLR due to
uncertainty in key markets (Europe, U.K. and U.S.) will negatively affect our volume
growth estimates. Further, softening of domestic interest rates poses an upside risk
to our domestic volume estimates.
Exhibit 18: Angel vs. consensus forecast
Angel estimates Consensus Variation (%)
FY12E FY13E FY12E FY13E FY12E FY13E
Net sales (` cr) 161,482 186,930 153,822 174,617 5.0 7.1
EPS ( ` ) 34.0 38.5 32.4 35.3 5.2 9.1
Source: Company, Angel Research
Exhibit 19: Key assumptions
Y/E March (units) FY08 FY09 FY10 FY11 FY12E FY13E
M&HCV 179,415 122,077 167,829 209,522 219,998 237,598
LCV 173,434 167,834 233,697 287,463 353,579 406,616
Total CV 352,849 289,911 401,526 496,985 573,578 644,214
UV 50,299 39,917 34,124 43,063 52,537 57,791
Cars 179,268 166,920 176,683 192,842 187,057 205,762
Nano - - 30,353 70,432 70,000 77,000
Total PV 229,567 206,837 241,160 306,337 309,594 340,553
Exports (Inc Above ) 54,272 31,611 34,141 58,044 63,268 69,595
Total volume 582,416 496,748 642,686 803,322 883,171 984,767
JLR volume - - - 243,621 306,557 331,082
Source: Company, Angel Research
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Tata Motors | 3QFY2012 Result Update
9February 15, 2012
Exhibit 20: One-year forward EV/EBITDA
Source: Company, Angel Research
Exhibit 21: Tata Motors vs. Sensex
Source: Company, Angel Research
Exhibit 22: Automobile – Recommendation summary
Company Reco.CMP
(`)Tgt. price
(`)Upside
(%)
P/E (x) EV/EBITDA (x) RoE (%) FY11-13E EPS
FY12E FY13E FY12E FY13E FY12E FY13E CAGR (%)
Ashok Leyland Accumulate 29 32 9.4 13.3 10.7 7.0 5.8 14.2 15.9 7.3
Bajaj Auto Neutral 1,746 - - 15.9 14.9 10.8 9.4 55.0 44.7 11.0
Hero MotoCorp Neutral 2,093 - - 17.8 15.5 10.4 8.7 66.2 55.0 21.0
Maruti Suzuki Neutral 1,304 - - 27.2 16.4 18.1 10.0 9.6 14.4 1.1
MM Accumulate 735 795 8.1 16.4 14.5 9.7 8.1 22.8 20.9 8.4
Tata Motors Accumulate 286 308 7.6 8.4 7.4 5.2 4.7 47.5 40.0 16.1
TVS Motor Buy 54 66 23.2 10.0 8.9 5.1 4.2 23.2 22.0 17.6
Source: Company, Angel Research
0
50,000
100,000
150,000
200,000
250,000
A p r -
0 3
D e c - 0
3
S e p - 0
4
J u n - 0
5
M a r -
0 6
D e c - 0
6
S e p - 0
7
J u n - 0
8
F e
b - 0
9
N o v - 0
9
A u g - 1
0
M a y - 1
1
F e
b - 1
2
( ` cr) EV (` cr) 2x 4x 6x 8x
0
50
100
150
200
250
A p r -
0 7
J u
l - 0 7
O c t - 0 7
F e
b - 0
8
M a y - 0
8
S e p - 0
8
D e c - 0
8
M a r -
0 9
J u
l - 0 9
O c t - 0 9
F e
b - 1
0
M a y - 1
0
S e p - 1
0
D e c - 1
0
M a r -
1 1
J u
l - 1 1
O c t - 1 1
F e
b - 1
2
Tata Motors Sensex
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Tata Motors | 3QFY2012 Result Update
10February 15, 2012
Profit & loss statement (consolidated)
Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13E
Gross sales 40,089 74,093 95,567 127,420 167,165 193,510
Less: Excise duty 4,668 3,212 3,048 4,286 5,684 6,579Net Sales 35,422 70,881 92,519 123,133 161,482 186,930
Total operating income 35,422 70,881 92,519 123,133 161,482 186,930
% chg 10.5 100.1 30.5 33.1 31.1 15.8
Total Expenditure 31,490 69,371 84,747 106,316 140,247 163,302
Net Raw Materials 24,376 48,025 61,495 79,008 104,156 121,505
Other Mfg costs 1,515 2,325 2,954 3,512 5,167 5,982
Personnel 2,745 7,297 8,943 9,343 12,434 14,581
Other 2,854 11,724 11,355 14,453 18,490 21,235
EBITDA 3,932 1,509 7,772 16,817 21,235 23,628
% chg 4.9 (61.6) 414.9 116.4 26.3 11.3
(% of Net Sales) 11.1 2.1 8.4 13.7 13.2 12.6
Depreciation & Amortization 782 2,507 3,887 4,656 5,554 6,357
EBIT 3,150 (997) 3,885 12,162 15,681 17,271
% chg 3.0 - - 213.1 28.9 10.1
(% of Net Sales) 8.9 (1.4) 4.2 9.9 9.7 9.2
Interest & other Charges 913 2,171 2,465 2,385 2,463 2,263
Other Income 619 748 1,058 452 412 485
(% of PBT) 20.1 (35.1) 30.0 4.3 3.0 3.1
Recurring PBT 2,856 (2,420) 2,478 10,228 13,630 15,493
% chg (7.4) - - 312.8 33.3 13.7
Extraordinary Expense/(Inc.) (230) (291) (1,045) (209) 0 0
PBT (reported) 3,086 (2,129) 3,523 10,437 13,630 15,493
Tax 852 336 1,006 1,216 2,794 3,254
(% of PBT) 27.6 (15.8) 28.6 11.7 20.5 21.0
PAT (reported) 2,235 (2,465) 2,517 9,221 10,836 12,240
Add: Share of earnings of asso. 65 (52) 85 101 50 80
Less: Minority interest (MI) 132 (11) 30 49 85 94
PAT after MI (reported) 2,168 (2,505) 2,571 9,274 10,801 12,226
ADJ. PAT 1,937 (2,796) 1,526 9,065 10,801 12,226
% chg (10.6) - - 494.0 19.2 13.2
(% of Net Sales) 5.5 (3.9) 1.6 7.4 6.7 6.5Basic EPS (`) 11.2 (9.7) 9.0 29.2 34.0 38.5
Fully Diluted EPS (̀ ) 10.0 (10.9) 5.3 28.6 34.0 38.5
% chg (82.1) - - 434.1 19.2 13.2
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Tata Motors | 3QFY2012 Result Update
11February 15, 2012
Balance sheet (consolidated)
Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13E
SOURCES OF FUNDS
Equity Share Capital 386 514 571 635 635 635Reserves & Surplus 8,312 5,427 7,827 18,537 25,660 34,186
Shareholders’ Funds 8,698 5,941 8,398 19,171 26,294 34,821
Minority Interest 468 403 214 247 247 247
Total Loans 11,585 34,974 35,108 32,791 30,791 28,291
Deferred Tax Liability 974 680 1,154 1,464 1,464 1,464
Total Liabilities 21,725 41,998 44,873 53,673 58,796 64,823
APPLICATION OF FUNDS
Gross Block 12,976 58,469 63,823 71,463 85,440 97,792
Less: Acc. Depreciation 6,060 33,269 34,232 39,699 45,252 51,609
Net Block 6,915 25,200 29,590 31,764 40,188 46,184
Capital Work-in-Progress 5,948 10,533 8,916 11,729 11,107 11,735
Goodwill 566 3,719 3,423 3,585 3,585 3,585
Investments 2,666 1,257 2,219 2,544 2,646 2,723
Current Assets 19,244 33,322 42,446 51,035 62,258 69,761
Cash 3,833 4,121 8,743 10,948 7,578 6,381
Loans & Advances 10,056 13,456 15,199 19,139 25,030 28,974
Other 5,355 15,745 18,503 20,948 29,650 34,405
Current liabilities 13,621 32,120 41,721 46,984 60,987 69,164
Net Current Assets 5,623 1,202 725 4,051 1,270 597
Mis. Exp. not written off 7 86 - - - -
Total Assets 21,725 41,998 44,873 53,673 58,796 64,823
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Tata Motors | 3QFY2012 Result Update
12February 15, 2012
Cash flow statement (consolidated)
Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13E
Profit before tax 3,086 (2,129) 3,523 10,437 13,630 15,493
Depreciation 782 2,507 3,887 4,656 5,554 6,357Change in Working Capital 4,003 4,709 5,099 (1,122) (589) (523)
Less: Others (820) (3,263) (1,448) (1,063) - -
Other income (619) (748) (1,058) (452) (412) (485)
Direct taxes paid (852) (336) (1,006) (1,216) (2,794) (3,254)
Cash Flow from Operations 5,581 739 8,997 11,240 15,388 17,588
(Inc.)/Dec. in Fixed Assets (5,983) (50,078) (3,736) (10,453) (13,356) (12,980)
(Inc.)/Dec. in Investments (1,491) 1,408 (962) (325) (102) (77)
Other 619 748 1,058 452 412 485
Cash Flow from Investing (6,855) (47,922) (3,640) (10,327) (13,045) (12,572)
Issue of Equity - 3,958 1,405 4,700 - -
Inc./(Dec.) in loans 4,283 23,389 135 (2,317) (2,000) (2,500)
Dividend Paid (Incl. Tax) 688 677 365 1,002 3,713 3,713
Other 1,018 (19,448) 3,113 2,094 - -
Cash Flow from Financing 3,953 47,471 (1,209) 1,291 (5,713) (6,213)
Inc./(Dec.) in Cash 2,679 288 4,148 2,205 (3,370) (1,197)
Opening Cash balances 1,154 3,833 4,121 8,743 10,948 7,578
Closing Cash balances 3,833 4,121 8,743 10,948 7,578 6,381
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Tata Motors | 3QFY2012 Result Update
13February 15, 2012
Key ratios
Y/E March FY08 FY09 FY10 FY11 FY12E FY13E
Valuation Ratio (x)
P/E (on FDEPS) 28.5 - 53.5 10.0 8.4 7.4
P/CEPS 18.3 1762 15.1 6.6 5.6 4.9
P/BV 6.4 12.6 10.0 4.8 3.5 2.6
Dividend yield (%) 1.0 0.4 1.1 1.4 3.5 3.5
EV/Sales 2.4 1.6 1.2 0.9 0.7 0.6
EV/EBITDA 24.4 79.8 14.8 6.6 5.2 4.7
EV / Total Assets 4.4 2.9 2.6 2.1 1.9 1.7
Per Share Data (`)EPS (Basic) 10.0 (10.9) 5.3 28.6 34.0 38.5
EPS (fully diluted) 6.8 (9.8) 5.3 31.8 37.9 38.5
Cash EPS 15.6 0.2 19.0 43.2 51.5 58.6DPS 3.0 1.2 3.0 4.0 10.0 10.0
Book Value 27.3 18.4 25.9 60.0 82.4 109.3
DuPont Analysis
EBIT margin 8.9 (1.4) 4.2 9.9 9.7 9.2
Tax retention ratio 0.7 1.2 0.7 0.9 0.8 0.8
Asset turnover (x) 2.4 2.7 2.6 3.3 3.7 3.6
ROIC (Post-tax) 15.8 (4.5) 7.9 29.1 28.2 26.2
Cost of Debt (Post Tax) 7.0 10.8 5.0 6.2 6.2 6.1
Leverage (x) 0.6 2.4 3.7 1.6 0.9 0.7
Operating ROE 21.1 (40.6) 18.7 65.3 47.5 39.4
Returns (%)
ROCE (Pre-tax) 16.7 (3.1) 8.9 24.7 27.9 27.9
Angel ROIC (Pre-tax) 20.7 (2.7) 11.5 30.4 32.4 31.1
ROE 23.6 (38.2) 21.3 65.8 47.5 40.0
Turnover ratios (x)
Asset Turnover (Gross Block) 3.0 2.0 1.5 1.8 2.1 2.0
Inventory / Sales (days) 33 37 44 38 38 41
Receivables (days) 19 18 24 21 23 23
Payables (days) 116 123 134 110 110 110
Working capital cycle (ex-cash) (days) 39 (3) (22) (22) (15) (12)
Solvency ratios (x)
Net debt to equity 0.6 5.0 2.9 1.0 0.8 0.6
Net debt to EBITDA 1.3 19.6 3.1 1.1 1.0 0.8
Interest Coverage (EBIT / Interest) 3.5 (0.5) 1.6 5.1 6.4 7.6
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Tata Motors | 3QFY2012 Result Update
Research Team Tel: 022 - 39357800 E-mail: research@angelbroking.com Website: www.angelbroking.com
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Disclosure of Interest Statement Tata Motors
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