RESULTS REVIEW 1QFY17

29 AUG 2016

Tata Motors
BUY
INDUSTRY

AUTOS

CMP (as on 26 Aug 2016)

Rs 504

Target Price

Rs 533

JLR cruising, despite worries

Promoters

33.01

FIs & Local MFs

16.84

FIIs

24.97

We believe currency fluctuations (esp post Brexit)

will disproportionately affect JLRs earnings for some
time. Adjusted for one-offs, insurance claims and
forex, TTMTs 1Q was slightly below expectation.
JLRs top-line at GBP 5.46bn (+9.1% YoY) was driven
by higher net ASP (+3% QoQ) (owing to GBP
depreciation). The 200 bps margin miss vs est (13.8%,
adjusted for FX markdowns on Euro payables) owed
to launch expenses of F-Pace, Evoque Convertible
and XE in the US. The India business recorded margin
improvement.
We believe JLRs volume growth momentum will
remain healthy given its strong new launch pipe. The
India business is also recovering with cyclical CV
revival and improving traction in PVs. However,
luxury auto demand in UK/EU might weaken due to
rising economic uncertainty while weaker GBP will
result in translation losses at JLR. Given the
improving profitability at Cherry (China JV), we have
revised our SOTP for TTMT to Rs 533 (up 3% from Rs
524). Maintain BUY.

Public & Others

25.18

Consolidated Financial Summary

Nifty

8,573

Sensex

27,782

KEY STOCK DATA

Bloomberg

TTMT IN

No. of Shares (mn)

3,396

MCap (Rs bn) / ($mn)

1,622/24,148

6m avg traded value (Rs mn)

4,250

STOCK PERFORMANCE (%)

52 Week high / low

Rs 523 / 266
3M

6M

12M

Absolute (%)

26.2

66.9

50.3

Relative (%)

20.8

46.9

42.3

SHAREHOLDING PATTERN (%)

Source : BSE

Abhishek Jain
abhishekkumar.jain@hdfcsec.com
+91-22-6171-7320
Sneha Prashant
sneha.prashant@hdfcsec.com
+91-22-6171-7336

Year Ending March (Rs mn)

Net Sales
EBITDA
APAT
Diluted EPS (Rs)
P/E (x)
EV / EBITDA (x)
RoE (%)

1QFY17
659
85
18
5.2

1QFY16
604
117
46
13.6

YoY (%)
9.1
(27.6)
(61.6)
(61.6)

Highlights of the quarter

Cautiously optimistic: Managements optimism is

driven by strength in underlying demand across
geographies as well as additional contribution
from new models (F-Pace, XE launch in US, Evoque
convertible etc). However, currency volatility from
Brexit will cap margins.

Capex guidance: The management maintains

capex guidance of GBP 3.75bn (ex-China JV) for
JLR. The China JV is likely to fund capex through
internal accruals. The India business capex is
pegged at ~Rs 35-40bn.

Near-term outlook: JLRs vols should ramp-up

sharply with the launch of F-Pace in EU/UK and XE
in the US. The improving profitability at the China
JV is also a positive. The India business should see
robust volume growth in CVs and PVs. Expect
stock trajectory to remain strong so long as JLR
traction persists.

4QFY16 QoQ (%)

807
(18.3)
131
(35.2)
52
(66.0)
15.4
(66.0)

FY15
2,628
395
145
45.0
11.2
5.4
23.8

FY16
2,756
374
138
40.6
12.4
5.8
20.1

FY17E
3,001
436
170
49.9
10.1
5.1
19.1

FY18E
3,331
487
201
59.2
8.5
4.4
18.9

Source: Company, HDFC sec Inst Research. * EV/EBITDA on adjusted basis please refer page to page 11 for details

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

TATA MOTORS: RESULT REVIEW 1QFY17

Quarterly Financials Snapshot (Consolidated)

Consolidated topline was 4%
ahead of expectations

EBITDA margin contraction of

652bps YoY was largely on
account of forex loss at JLR

APAT at Rs 22.7bn was below

est on lower OPM and higher
depreciation

Particulars
Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Depreciation
EBIT
Other Income
Interest Cost
Product Development Cost
PBT
Tax
RPAT
Share of profits in associates/JVs
RPAT before EO Items
EO Items (Adj For Tax)
APAT
Adj EPS

1QFY17
6,58,949
3,90,908
74,664
1,08,537
84,840
45,508
39,332
1,736
11,694
8,711
20,662
7,200
13,462
4,290
17,752
(4,905)
22,658
5.2

1QFY16
6,04,009
3,56,340
68,856
61,691
1,17,123
37,416
79,707
2,241
11,496
7,055
63,398
16,485
46,912
(708)
46,204
93
46,111
13.6

YoY (%)
9.1
9.7
8.4
75.9
(27.6)
21.6
(50.7)
(22.5)
1.7
23.5
(67.4)
(56.3)
(71.3)
(705.8)
(61.6)
(5,352.0)
(50.9)
(61.6)

1QFY17
59.3
11.3
16.5
12.9
34.8
3.4

1QFY16
59.0
11.4
10.2
19.4
26.0
7.6

YoY (bps)
33
(7)
626
(652)
884
(420)

Source: Company, HDFC sec Inst Research

Margin Analysis (Consolidated)

Material Expenses As % Of Net Sales
Employee Expenses As % Of Net Sales
Other Expenses As % Of Net Sales
EBITDA Margin (%)
Net Profit Margin (%)
Tax Rate (%)
Source: Company, HDFC sec Inst Research

Page | 2

TATA MOTORS : RESULT REVIEW 1QFY17

Quarterly Financials Snapshot (Standalone)

Standalone topline growth of
~10% YoY due to better-thanexpected rise in net ASPs (~4%
QoQ)

EBITDA margin improved

63bps YoY led by gross
margins expansion of 151 bps,
partially offset by higher
other expenses
The outlook for the
standalone business is
improving with continued
growth in MHCVs (growth
from pre-buying ahead of
BSIV norms and fleet
expansion), recovery in LCV
demand and a good response
for Tiago

(Rsmn)
CV (Domestic, in units)
PV (Domestic, in units)
Exports (in units)
Total Volumes (in units)
Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Depreciation
EBIT
Other Income
Interest Cost
Product Development Cost
PBT
Tax
RPAT
EO Items (Adj For Tax)
APAT
Adj EPS

1QFY17
78,328
31,966
13,816
1,24,110
1,03,196
68,865
8,983
18,443
6,905
7,122
(218)
6,246
3,401
1,162
1,465
121
1,344
1,087
258
0.4

1QFY16
71,414
31,586
13,510
1,16,510
93,242
63,632
8,083
15,877
5,651
5,803
(152)
9,072
4,350
944
3,626
422
3,204
306
2,898
0.9

YoY (%)
9.7
1.2
2.3
6.5
10.7
8.2
11.1
16.2
22.2
22.7
43.4
(31.2)
(21.8)
23.0
(59.6)
(71.3)
(58.1)
255.4
(91.1)
(55.1)

1QFY17
66.7
8.7
17.9
6.7
8.3
1.3

1QFY16
68.2
8.7
17.0
6.1
11.6
3.4

YoY (bps)
(151)
4
151.4
63
(336)
(213)

4QFY16
99,487
30,144
17,135
1,46,766
1,25,698
84,891
7,445
23,144
10,217
6,140
4,077
1,297
3,438
1,254
682
(953)
1,635
(3,015)
4,650
0.5

QoQ (%)
(21.3)
6.0
(19.4)
(15.4)
(17.9)
(18.9)
20.6
(20.3)
(32.4)
16.0
(105.3)
381.6
(1.1)
(7.3)
114.8
(112.7)
(17.8)
(136.0)
(94.5)
(17.8)

Source: Company, HDFC sec Inst Research

The company hopes to

turnaround its PV business
with two new launches every
year till 2020

Margin Analysis (Standalone)

Material Expenses % Net Sales
Employee Expenses % Net Sales
Other Operating Expenses % Net Sales
EBITDA Margin (%)
Tax Rate (%)
APAT Margin (%)

4QFY16
67.5
5.9
18.4
8.1
(139.8)
1.3

QoQ (bps)
(80)
278
(54)
(144)
14,803
0

Source: Company, HDFC sec Inst Research

Page | 3

TATA MOTORS : RESULT REVIEW 1QFY17

JLRs topline was above

expectations owing to net
ASP rise on sequential basis

JLRs EBITDA margin was

impacted by GBP 84mn
charge for revaluation of
current assets/liabilities,
arising out of sharp GBP
depreciation after Brexit and
lower local market incentives
(GBP 10mn vs GBP 50mn in
1QFY16). Excluding this,
margin would have been
13.8% vs our est of 15.8%

Quarterly Financials Snapshot (JLR - IFRS)

In GBP mn
Retail Volumes (000 units)
Wholesale Volumes Ex-CJLR (000 units)
Revenue
Material Expenses
Employee Expenses
Other Operating Expenses
Product Development Expense
EBITDA
Interest Cost
Depreciation
Debt/Unrealised MTM Loss/(Gain)
Share Of Profit/(Loss) From JV
PBT
Exceptional Item
Tax
APAT
RPAT

1QFY17
132.7
121.0
5,461
3,227
605
1,279
(322)
672
12
388
(82)
45
399
51
95
304
355

1QFY16
114.9
110.6
5,002
2,906
552
1,038
(315)
821
10
318
(149)
(4)
638
146
492
492

YoY (%)
15.5
9.3
9.2
11.0
9.6
23.2
2.2
(18.1)
20.0
22.0
(45.0)
(1,225.0)
(37.5)
(34.9)
(38.2)
(27.8)

4QFY16
158.8
149.9
6,594
3,828
648
1,347
(298)
1,069
13
378
42
49
685
(108)
105
580
472

QoQ (%)
(16.4)
(19.3)
(17.2)
(15.7)
(6.6)
(5.0)
8.1
(37.1)
(7.7)
2.6
(295.2)
(8.2)
(41.8)
(147.2)
(9.5)
(47.6)
(24.8)

1QFY17
59.1
11.1
23.4
12.3
5.6
23.8

1QFY16
58.1
11.0
20.8
16.4
9.8
22.9

YoY (bps)
99.5
4.3
266.9
(410.8)
(426.9)
92.6

4QFY16
58.1
9.8
20.4
16.2
8.8
15.3

QoQ (bps)
103.9
125.1
299.3
(390.6)
(322.9)
848.1

Source: Company, HDFC sec Inst Research

Margin Analysis (JLR IFRS)

Material Expenses As % Of Net Sales
Employee Expenses As % Of Net Sales
Other Expenses As % Of Net Sales
EBITDA Margin (%)
Net Profit Margin (%)
Tax Rate (%)
Source: Company, HDFC sec Inst Research

Page | 4

TATA MOTORS : RESULT REVIEW 1QFY17

JLR: Key Financial Highlights / Model Assumptions

We have maintained our
FY17/18E estimates

Outlook for JLR volume

growth appears healthy with
its new product cycle

In view of China JVs profits

improving in 1QFY17, we are
increasing the multiple

in Mn
Revenue
% YoY
Wholesales Volumes Incl CJLR (in '000)
% growth
Net ASP
% YoY
Expenditure
Material Cost
% Of Sales
Employee Cost
% Of Sales
Other Expenses
% Of Sales
Add back R&D Cost
% Of Sales
R&D Cost Expensed
Total
% Of Sales
EBITDA
EBITDA margin %
Other Income
Depreciation And Amortisation
Interest Expense
Forex gain/(loss)
Share Of Profit/(Loss) From Joint Venture
% Of Sales
PBT
% Of Sales
Tax
Tax rate %
APAT
% Of Sales
RPAT
% Of Sales

FY14
19,386
22.8
430
15.5
45,098
6.3

FY15
21,866
12.8
471
9.5
46,875
3.9

FY16
22,208
1.6
544
15.6
43,602
(7.0)

FY17E
24,666
11.1
628
15.3
43,851
0.6

FY18E
27,138
10.0
695
10.8
44,976
2.6

11,904
61.4
1,654
8.5
3,465
17.9
(1,266)
(6.5)
236
15,993
82.5
3,393.0
17.5
875
147
137
(7)
(0.0)
2,501
12.9
622
24.9
1,879
9.7
1,879
9.7

13,185
60.3
1,977
9.0
3,730
17.1
(1,411)
(6.5)
253
17,734
81.1
4,132.0
18.9
1,051
87
(373)
(7)
(0.0)
2,614
12.0
576
22.0
2,038
9.3
2,038
9.3

13,146
59.2
2,321
10.5
4,670
21.0
(1,560)
(7.0)
318
18,895
85.1
3,313.0
14.9
1,403
54
(27)
66
0.3
1,895
8.5
247
13.0
1,649
7.4
1,326
6.0

14,652
59.4
2,541
10.3
5,039
20.4
(1,750)
(7.1)
350
20,831
84.5
3,834.9
15.5
1,655
45
111
0.5
2,246
9.1
515
22.9
1,731
7.0
1,731
7.0

16,174
59.6
2,768
10.2
5,427
20.0
(1,820)
(6.7)
364
22,914
84.4
4,224.8
15.6
1,834
45
170
0.6
2,515
9.3
567
22.5
1,948
7.2
1,948
7.2

Source: Company, HDFC sec Inst Research

Page | 5

TATA MOTORS : RESULT REVIEW 1QFY17

Standalone: Key Financial Highlights/ Model Assumptions

Expect healthy volume

growth across the CV and PV
segments for TTMT in FY17

Expect EBITDA margins also

to expand with operating
leverage benefits

Rs in Mn
Vehicle Sales (in units)
CV (Domestic)
PV (Domestic)
Exports
Total
% YoY
Net Sales
% YoY
Other Operating Income
Total Income From Operations
Expenditure
RM Cost
% Of Sales
Employee Cost
% Of Sales
Other
% Of Sales
Total Expenses
% Of Sales
EBITDA
EBITDA Margin %
Other Income
Product Development Expenses
Depreciation
Interest
PBT (Pre-exceptional Items)
PBT (Pre-exceptional And JLR Dividend)

FY14

FY15

FY16

FY17E

FY18E

381,412
135,287
49,892
566,591
(30.0)
339,070
(23.6)
3,811
342,881

329,943
133,304
49,917
513,164
(9.4)
358,905
5.8
4,042
362,948

327,730
125,945
57,991
511,666
(0.3)
419,480
16.9
4,218
423,698

381,300
148,100
65,621
595,021
16.3
503,828
20.1
4,640
508,468

429,514
173,100
71,742
674,356
13.3
585,839
16.3
5,104
590,943

259,144
76.4
28,777
8.5
59,784
17.6
347,705
93.0
(4,824)
(1.4)
18,669
4,287
20,703
13,532
(24,677)
(38,230)

270,417
75.3
30,915
8.6
66,518
18.5
367,849
94.0
(4,901)
(1.4)
18,815
4,375
26,032
16,117
(32,610)
(47,460)

295,953
70.6
30,267
7.2
70,076
16.7
396,296
85.7
27,402
6.5
14,765
4,246
24,538
14,811
(1,427)
(15,745)

356,944
70.8
34,564
6.9
78,654
15.6
470,162
84.5
38,306
7.6
17,188
4,500
27,492
13,196
10,306
(4,094)

416,615
71.1
38,200
6.5
85,775
14.6
540,590
83.6
50,353
8.6
17,645
5,000
29,960
12,889
20,149
5,749

Source: Company, HDFC sec Inst Research

Page | 6

TATA MOTORS : RESULT REVIEW 1QFY17

We have raised our multiple

for the China JV given the
improving profitability. Our
TP has been revised to Rs 533

SOTP Valuation
Standalone
JLR
China JV
Other Subsidiaries
Less: Net Automotive Debt
Target Price

Valuation methodology
EV / EBIDTA on Mar 18E
EV / EBIDTA on Mar 18E
EV / EBIDTA on Mar 18E
P/E, PBV on Mar 18E

Multiple
8.0
4.0
5.0

Per share
119
371
43
28
28
533

Source: HDFC sec Inst Research

Change In Estimates
In Rs bn
Net Sales
EBITDA
Adj PAT
Adj EPS

New
FY17E
3,001
436
170
49.9

FY18E
3,331
487
201
59.2

Old
FY17E
3,001
436
170
49.9

FY18E
3,331
487
201
59.2

% chg
FY17E
-

FY18E
-

Source: HDFC sec Inst Research

Page | 7

TATA MOTORS : RESULT REVIEW 1QFY17

100

40.0%

15.0%
10.0%

40
20
-

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

0.0%

1QFY15

19

17

21

18

16

21

21

29

18

60

5.0%

0.0%

20

21

16

21

27

30

28

20

15

16
16

20

15

17
14

14
20

13
23

25

19

25

27
11

27

26

11

21

21

19

24

21

22

1QFY17

20.0%

22

4QFY16

25.0%

21
80

30.0%

60.0%

ROW

3QFY16

80.0%

Europe

2QFY16

35.0%

China

1QFY16

40.0%

NA

4QFY15

100.0%

20.0%

The management expects

both RR/RRS to clock decent
volume growth in FY17

UK

Share of RR+RRS % - RHS

2QFY15

With an increase in share of

recently launched models
including XE/Discovery Sport,
the share of highly profitable
models (RR + RRS) witnessed
a marginal decline

Land Rover

1QFY15

Jaguar

JLR:China Mix Fell QoQ

3QFY15

JLR Model Mix Slightly Weaker

Source: Company, HDFC sec Inst Research

Source: Company, HDFC sec Inst Research

TTMTs MHCV Market Share Declined

TTMTs PV Market Share Declined Sequentially

China mix witnessed sharp

fall

Source: SIAM, HDFC sec Inst Research

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

35.0%

3QFY15

2QFY15

10

40.0%

5.0%
4.5%
4.0%

1QFY17

20

5.5%

4QFY16

45.0%

3QFY16

30

6.0%

2QFY16

50.0%

1QFY16

40

6.5%

4QFY15

55.0%

7.0%

3QFY15

50

M/S - RHS

50
45
40
35
30
25
20
15
10
5
0

2QFY15

60.0%

1QFY15

TTMTs MHCV market share

fell to ~50% with severe
pricing competition

Volumes (in '000)

M/S - RHS

1QFY15

Volumes (in '000)

60

Source: SIAM, HDFC sec Inst Research

Page | 8

TATA MOTORS : RESULT REVIEW 1QFY17

Peer Valuations

Ashok Leyland
Atul Auto
Bajaj Auto
Eicher Motors
Hero Motocorp
M&M
Maruti Suzuki
SML Isuzu
Tata Motors

Mcap
(Rs bn)

CMP
(Rs/sh)

Rating

TP

250
10
826
604
663
843
1,485
19
1,712

88
445
2,853
22,280
3,319
1,427
4,916
1,344
504

NEU
BUY
NEU
BUY
BUY
NEU
BUY
NEU
BUY

82
643
2,685
24,736
3,325
1,410
5,318
1,086
533

Adj EPS (Rs/sh)

FY16 FY17E FY18E
3.9
4.3
5.1
21.6
26.0
32.3
126.2 139.4 157.2
470.7 609.4 829.1
156.8 172.4 190.0
55.5
70.1
79.4
153.9 200.4 245.6
35.3
52.7
67.9
40.6
49.9
59.2

FY16
22.5
20.6
22.6
47.3
21.2
25.7
31.9
38.1
12.4

P/E (x)
FY17E FY18E
20.5
17.2
17.1
13.8
20.5
18.2
36.6
26.9
19.3
17.5
20.4
18.0
24.5
20.0
25.5
19.8
10.1
8.5

EV/EBITDA (x)
FY16 FY17E FY18E
12.1
10.9
9.6
12.6
10.0
8.0
15.4
13.6
11.8
22.0
19.4
14.1
14.1
12.5
11.2
15.3
12.5
10.8
16.3
14.7
12.0
23.2
16.2
12.3
5.8
5.1
4.4

FY16
20.9
34.4
31.8
39.5
43.1
15.6
18.3
15.9
20.1

RoE (%)
FY17E FY18E
21.0
22.4
32.6
32.3
30.8
30.8
40.9
40.5
39.6
37.6
17.6
17.7
20.7
21.9
20.7
22.8
19.1
18.9

Source: Company, HDFC sec Inst Research*Tata Motors EV/EBITDA based on EV less net auto debt and adjusted EBITDA (normalised R&D spends in line with luxury car makers)

Page | 9

TATA MOTORS : RESULT REVIEW 1QFY17

Income Statement : Consolidated

(Rs bn)
Net Revenues
Growth (%)
Material Expenses
Employee Expenses
Product Development Exps
Other Operating Expenses
EBITDA
EBITDA Margin (%)
EBITDA Growth (%)
Depreciation
EBIT
Other Income
Interest
PBT
Tax (Incl Deferred)
Minority Interest
Profit from Associate Cos
APAT
APAT Growth (%)
Adjusted EPS (Rs)
EPS Growth (%)
EO (Loss) / Profit (Net Of Tax)
RPAT

FY14
2,328
23.3
1,436
216
26
303
348
15.0
41.6
111
238
8
47
199
48
(1)
(1)
150
42.7
46.5
41.4
(10)
140

Source: Company, HDFC sec Inst Research

Balance Sheet : Consolidated

FY15
2,628
12.9
1,599
255
29
349
395
15.0
13.5
134
262
9
49
222
76
(1)
0
145
(3.3)
45.0
(3.3)
(5)
140

FY16
2,756
4.9
1,624
292
35
431
374
13.6
(5.4)
170
204
10
46
167
29
(1)
0
138
(4.8)
40.6
(9.8)
(28)
110

FY17E
3,001
8.9
1,785
309
37
433
436
14.5
16.6
192
245
9
39
214
54
(1)
10
170
23.0
49.9
23.0
170

FY18E
3,331
11.0
1,992
338
39
474
487
14.6
11.7
211
276
9
39
246
60
(1)
16
201
18.5
59.2
18.5
201

(Rs bn)
SOURCES OF FUNDS
Share Capital - Equity
Reserves
Total Shareholders Funds
Minority Interest
Long-term Debt
Short-term Debt
Total Debt
Net Deferred Taxes
Long-term Provisions & Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Goodwill
Investments
LT Loans & Advances
Total Non-current Assets
Inventories
Debtors
Cash & Equivalents
Total Current Assets
Creditors
Other Current Liabilities & Provns
Total Current Liabilities
Net Current Assets
TOTAL APPLICATION OF FUNDS

FY14

FY15

FY16

FY17E

FY18E

6
650
656
4
606
606
(8)
202
1,461

6
556
563
4
736
736
(14)
212
1,501

7
801
808
9
705
705
4
205
1,731

7
961
968
10
735
735
10
220
1,942

7
1,150
1,157
10
752
752
16
228
2,162

641
336
50
11
367
1,405
273
106
393
771
716

838
289
47
12
293
1,479
293
126
462
881
858

1,003
285
48
13
331
1,681
334
130
521
985
935

1,183
284
48
13
365
1,893
392
153
459
1,005
956

1,341
288
48
13
395
2,086
428
167
488
1,083
1,007

716
55
1,461

858
22
1,501

935
50
1,731

956
49
1,942

1,007
77
2,162

Source: Company, HDFC sec Inst Research

Page | 10

TATA MOTORS : RESULT REVIEW 1QFY17

Cash Flow: Consolidated

(Rs bn)
Reported PBT
Non-operating & EO items
Interest expenses
Depreciation
Working Capital Change
Tax Paid
OPERATING CASH FLOW ( a )
Capex
Free Cash Flow (FCF)
Investments
Non-operating Income
INVESTING CASH FLOW ( b )
Debt Issuance/(Repaid)
Interest Expenses
FCFE
Share Capital Issuance
Dividend
FINANCING CASH FLOW ( c )
NET CASH FLOW (a+b+c)
EO Items, Others
Closing Cash & Equivalents
Source: Company, HDFC sec Inst Research

Key Ratios: Consolidated

FY14
189
(10)
47
111
25
(48)
314
(400)
(86)
(4)
159
(245)
71
(47)
(63)
4
(7)
20
88
393

FY15
222
(5)
49
134
187
(76)
510
(281)
230
1
(7)
(286)
130
(49)
311
(233)
(152)
72
(3)
462

FY16
167
(28)
46
170
(14)
(29)
313
(333)
(20)
0
22
(311)
(31)
(46)
(98)
136
(1)
57
59
521

FY17E
214
39
192
(79)
(54)
312
(370)
(58)
16
(354)
30
(39)
(68)
(10)
(19)
(62)
459

FY18E
246
39
211
(21)
(60)
415
(374)
41
22
(352)
17
(39)
19
(12)
(34)
29
488

PROFITABILITY (%)
GPM
EBITDA Margin
APAT Margin
RoE
RoIC (or Core RoCE)
RoCE
EFFICIENCY
Tax Rate (%)
Fixed Asset Turnover (x)
Inventory (days)
Debtors (days)
Payables (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E (x)
Interest Coverage (x)
PER SHARE DATA (Rs)
EPS
CEPS
Dividend
Book Value
VALUATION
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Revenues (x)
OCF/EV (%)
FCF/EV (%)
FCFE/Mkt Cap (%)
Dividend Yield (%)

FY14

FY15

FY16

FY17E

FY18E

38.3
15.0
6.4
29.0
20.7
16.8

39.1
15.0
5.5
23.8
17.0
13.6

41.1
13.6
5.0
20.1
14.9
12.4

40.5
14.5
5.6
19.1
13.6
12.4

40.2
14.6
6.0
18.9
13.4
12.8

24.0
1.8
42.8
16.6
112.2
(52.9)
1.7
0.1
5.0

34.4
1.7
40.7
17.5
119.2
(61.1)
1.9
0.2
5.4

17.2
1.4
44.2
17.2
123.8
(62.4)
1.9
0.0
4.4

25.3
1.3
47.7
18.7
116.3
(49.9)
1.7
0.1
6.2

24.6
1.3
47.0
18.3
110.3
(45.1)
1.5
0.1
7.1

46.5
72.7
2.0
118.0

45.0
78.8
203.8

37.5
71.8
2.0
174.8

46.9
94.6
2.5
214.2

56.0
108.9
3.0
258.2

10.8
2.5
5.8
0.7
18.9
(5.2)
(3.9)
0.4

11.2
2.9
5.4
0.7
29.5
13.3
19.2
-

12.4
2.1
5.8
0.6
18.0
(1.2)
(5.7)
0.0

10.1
1.8
5.1
0.6
17.3
(3.2)
(4.0)
0.5

8.5
1.5
4.4
0.5
23.4
2.3
1.1
0.6

Source: Company, HDFC sec Inst Research * EV/EBITDA based on EV less net auto debt and
adjusted EBITDA (normalised R&D spends in line with luxury car makers).

Page | 11

TATA MOTORS : RESULT REVIEW 1QFY17

RECOMMENDATION HISTORY
Tata Motors

700

Date
8-Aug-15
23-Sep-15
7-Nov-15
12-Feb-16
12-May-16
31-May-16
29-Aug-16

TP

600
500
400

CMP
393
316
396
276
380
421
504

Reco
BUY
BUY
BUY
BUY
BUY
BUY
BUY

Target
515
445
435
434
479
524
533

300

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

200

Rating Definitions
BUY: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL: Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Page | 12

TATA MOTORS : RESULT REVIEW 1QFY17

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Page | 13