Tata Motors - Maintain Buy - Motilal Oswal

TATA MOTORS: JLR's Jan-11 volumes in-line with 25% YoY growth (~4.6% MoM de-growth) to 20,377 units (v/s est 20,000 units)

JLR's Jan-11 volumes at 20,377 units (v/s est 20,000 units) were in-line, with growth of 25% YoY (~4.6% MoM decline).

Land rover volumes improved 30% YoY (~2% MoM) to 17,321 units, while Jaguar numbers disappointed with growth of just 3% YoY to 3,056 units.

While demand growth continues to be good in US and China, Russia is showing signs of improvement but European demand continues to be muted.

For FY11YTD, volumes grew by 28% to 195,819 units. We estimate volume growth of 25.5% in FY11, implying residual monthly run-rate of 23,847.

Tata Motor's stock trades at 7.4x FY12 consolidated EPS (fully diluted) and 10.8x FY12 consolidated normalized EPS (adj for R&D capitalization). The DVR shares trades at 4.4x FY12 consolidated EPS (fully diluted) and 6.4x FY12 consolidated normalized EPS (adj for R&D capitalization). Maintain Buy.

Source : Equity Bulls

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