Tuesday, October 27, 2009

[Investors Please Listen] Tata Motors 2QFY10 Result Update ; In line, maintain SELL rating ; SELL ; Target: Rs 398

Tata Motors Ltd.  

 

In line, maintain SELL rating


SELL

 

CMP: Rs 539                            Target Price: Rs 398


Tata Motors' (TML) 2QFY10 standalone results were in line with estimates at operating level. Adj net profit at Rs 3.7 bn was lower than our expectation of Rs 4.8 bn largely due to signficant increase in tax expenses. Against our expectation of tax expenses of Rs 840 mn, company reported tax expense of Rs 1.8 bn.

We have fined tuned our estimates to factor in higher volumes from Uttaranchal plant (Tata Ace and Nano) and recent fund raising activity. We have upgraded our FY10 and FY11 estimates by 7% and 8% to  Rs 23.9 and Rs 28.3 per share respectively. We maintain our SELL rating with a target price of Rs 398. We have valued TML standalone at target EV/EBIDTA multiple of the standalone business to 7x (20% discount to M&M). We have valued JLR at 5x EV/EBIDTA and other subsidiaries (ex TMFSL) at 20% discount to TML. We maintain our SELL rating on the stock with a target price of Rs 398. 


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The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.
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