Tata Motors (TML) reported a healthy Q2FY21 performance. Consolidated net sales were at Rs. 53,530 crore, down 18.2% YoY (India down 3.3%, JLR down 29%) tracking 32% YoY volume decline in JLR operations. EBITDA margins were at 12.5% amid savings in other expenses. JLR margin print returned to double digit territory (11.1%) while India PV business achieved EBITDA breakeven. Consequent consolidated loss after tax was at Rs. 307 crore, with JLR PBT at £65 million and standalone loss at Rs. 1,213 crore.
Valuation & Outlook
For TML we build 6% sales CAGR in FY20-23E, with FY23E profit of Rs. 6,620 crore. Our estimates factor in flattish JLR and ~9% India volume CAGR over that time. TML's stated deleveraging intent (near zero automotive debt over next few years) is a hugely positive development. Improvement in JLR volumes ex-China and further progress on cost and cash controls are key monitorables. We maintain BUY, valuing TML at Rs. 165 on SOTP basis (10x, 4x FY22E EV/EBITDA to standalone business & JLR, respectively).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TataMotors_Q2FY21.pdf
Shares of TATA MOTORS LTD. was last trading in BSE at Rs.134.8 as compared to the previous close of Rs. 135.7. The total number of shares traded during the day was 10895926 in over 67948 trades.
The stock hit an intraday high of Rs. 143.15 and intraday low of 133.5. The net turnover during the day was Rs. 1512891968.