Team: Investopreneurs

Team Members:
Neha Jain
Siddharth Maiti
Sourabh Singh

TATA MOTORS
EK KADAM AAGE

TATAMOTORS /
INE155A01022
Sector:
Consumer Cyclical
Industry: Auto Manufacturers
Employees: 73,485
Last price: INR 343.00 (19th January, 2016)

3 Months

372

Short Term trend: Bearish

12 Months

385
Mid Term Trend: Accumlate/Hold

24 Months

490

Long Term Trend: Bullish/Outperformer

Fundamental value: 405

Technical Value: 372

Fundamental Value: 368

Declining Metal and Oil Prices

Continous Growth in JLR+China Crisis

Pay Comission Effect+Higher Income Levels

Regulatory Concern

Growth in Passenger Vehicle Market

GST in Effect + Govt.Spending on Infra

Changes in Managment

Low inflation and Intrest rate

Inclination Towards Four Wheelers

Technical Analysis

Fundamental Analysis

Fundamental Analysis

Industry Overview
Ripe for Growth

1
2
3
4
5

Production
Total production: 23,366,246 vehicles
Growth over the same period last year: 8.68%

Domestic Sales

Sales of Passenger Vehicle: 3.90%.

Commercial Vehicles segment registered a de-growth of (-) 2.83%

Exports
Overall automobile exports grew by 14.89 percent
over the same period last year.

Market Share
Passenger vehicles: 89%
Commercial Vehicles: 11%

Competitor Analysis (Volume)

MANAGEMENT & GOVERNANCE

Shift and Stability

Recent Changes
Risk Management Committee
(RMC)
Voluntary Retirement Scheme
(VRS)

Guenter
Managing
Director and CEO
Butsche

Shareholding Pattern:
No Foreign promotors of the firm.
Tata Sons Ltd hold 741,091,591
shares and Tata Steel owns
160,037,285.
New CEO: Guenter Butsche expected to join
the company from 15th February 2016.In his
last assignment at Airbus Group
where he served as Chief Operating
Officer at Airbus He has more than
25 years of experience in
international automotive
management, leading functions like
production, industrialization and
procurement.

Shareholding
Pattern
27.5 %
TATA Sons

TATA Steel

2.94%

6.35%

LIC

ICICI Prudentials

1.91%

Sales Figures

Trends and Opportunities

2.3%

12.8%

20.7%

38%

TATA Motors
Group

JLR

M&HC

International
Business

997550 21.8% 52.6% 27.4%

Vehicles Sales

Increase in EBITDA

Market Share

Commercial vehicles constituted

a third of it

China continues to remain its

larget market. It grew by 12.5%

The debt to equity ratio came

down to 0.63:1 from 1.36

Domestic Passenger Vehicle

1,500 outlets in the next four
years.

Technical Analysis
A Chartists Perspective

Trends Short
Res.
372
-8,5
Spread/
Res.
5,2%
Spread/
Supp.
324
Support

Medium Long
424
574
-20%

-41%

20%

15%

285

296

390.82
374.92

-14.78%
367.04
-10.11%

-7.79%

MA20 MA50 MA100MA20/ MA50/ MA100/

Price Price Price

Outlook and Valuations

Looking Ahead

2014

2016E

Revenues (INR mn) : 2,328,336

Retention ratio: 95.41%
P/E Ratio: 10.47
EPS: 43.6
Payout Ratio: 0.046
Growth Rate: 21.94%

Revenues (INR mn): 2,750,929

Retention ratio: 94.43%
P/E Ratio: 6.52
EPS: 38.54
Payout Ratio: 0.056
Growth Rate: 37.29%

2015

Revenues (INR mn) : 2,401,802

Retention ratio: 100%
P/E Ratio: 7.73
EPS: 43.43
Payout Ratio: 0
Growth Rate: 25.32%

2017E

Revenues (INR mn) : 3,096,951

Retention ratio: 95.68%
P/E Ratio: 5.50
EPS: 51.2
Payout Ratio: 0.043
Growth Rate: 58.92%

Fundamental Analysis
An Analyst Perspective

Tata Motors average current ratio over the last 5 financial years has been 0.88 times.

Tata Motors average long term debt to equity ratio over the last 5 financial years has been 1.94 times which
indicates that the Company is vulnerable to economic slowdowns.
Tata Motors average interest coverage ratio over the last 5 financial years has been 5.07 times which indicates
that the company has been generating enough for the shareholders after servicing its debt obligations

The difference between current prices and the average target price is rather important and implies
a significant appreciation potential for the stock.
The ROE (after subtracting preferred shares) tells common shareholders how effectively their money is being
employed. Ideal long term average ROE should be above 15%.

External Factors

Impact and Analysis

+
01

Macro-Economic

02

+
Micro-Economic

03

=
Tax/Regulations

Investment Decision

AA
Positive

BB

BUY

Stable

Target Price: 490

BUY

BUY
Accumulate:471

Target Price: 480

THANK YOU!!
TATA MOTORS