Wednesday, September 29, 2010

Tata Motors; JLR to drive the performance, Maintain ACCUMULATE; Target: Rs1,235

Tata Motors

Reco: ACCUMULATE

CMP: Rs1,080

Target Price: Rs1,235

JLR to drive the performance, Maintain ACCUMULATE

·      Strong demand outlook for FY11/FY12, driven by LCVs. JLR continues to suffer with engine shortage. No major pre buying is visible in M&HCVs. Nano's order backlog is almost over

·      Domestic business to witness cost pressures. JLR margins are sustainable but for currency fluctuations. Price hike due to emission norms is not yet decided

·      We believe that momentum in M&HCV to peak out, expect concerns for FY12 volumes to set in 3Q/4QFY11. However JLR to more than compensate for downside risk in M&HCVs

·      Upgrading FY11/FY12 EPS estimates by 10%/13% to Rs110.6/Rs137.8 due to upgrade in JLR est. Raise our SOTP based TP to Rs1,235 (up by 8%), maintain ACCUMULATE 

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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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