Motilal Oswal 's research report on Tata Motors
Jaguar Land Rover (JLR)’s wholesale volumes declined 44.8% YoY to ~65.4k units (v/s est.: ~49k) in 1QFY21, whereas volumes for the China JV grew ~15% YoY at ~16.5k units. Jaguar volumes fell ~54% YoY to ~18k units (our estimate: 15.6k), whereas Land Rover (LR) volumes contracted ~40% YoY to ~47.5k units (our estimate: 33.4k). JLR’s 1QFY21 retail sales declined ~42% YoY to ~74k, with LR decreasing ~38% and Jaguar ~52.5%. Jun’20 retail sales fell ~25% YoY to 35.3k. This was the first month of retail for many markets, such as the UK. In Jun’20, China (-7.4% YoY) and North America (+2.2% YoY) were particularly encouraging. UK sales were down 31.8%, EU sales 52.5%, and RoW sales 33.1%. Over 95% of JLR’s retailers worldwide have totally/partially restarted their operations by now; moreover, all of the company’s plants have resumed manufacturing, with the exception of the Castle Bromwich facility, which would gradually start up again in August. All plants are operating on single shifts, with social distancing measures in place and production ramping up as demand increases.
Outlook
The stock trades at 2.7x FY22 EV/EBITDA and 0.7x P/BV. Maintain Buy, with TP of ~INR126 (Jun’22-based SOTP).
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