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Research
Tata Motors - JLR sales volume up 29% yoy - BRICS
Posted On : 2012-05-16 11:16:54( TIMEZONE : IST )
Wholesale volume up 29% yoy
Tata Motors' JLR sales (wholesale) for April 2012 were up 29% yoy (down31% mom) at 25,143 units. Land Rover sales were up 32% yoy (down31% mom) while Jaguar sales were up by 17% yoy at 3,063 units (down33% mom).
JLR April sales are above average: Over the last three years, average sales in Q1 of the fiscal have contributed 21% of annual volume and Q4 contribution averages 31%. Using this trend as a guideline, we estimate monthly sales of 24,000 units in Q1FY13 - JLR's April 2012 sales of 25,143 have come in slightly better than this trend.
In FY12, JLR reported 28% yoy growth to 310,214 units-Jaguar's sales were flat at 52,919 units while Land Rover grew 37% to 257,295 units.
Retail sales grow yoy in April 2012
US retail sales up 3% yoy
In April 2012, JLR reported 3% yoy growth in overall US retail sales – while Jaguar sales declined 14% and Land Rover growth of 10% pulled up overall sales. US luxury carsales declined 18% yoy during the month. A resurgent US auto sector has been one ofthe bright spots in the economy.
UK retail sales up 54% yoy
JLR's UK retail sales grew 54% yoy, down 85% - Jaguar's sales were up 56% and LandRover's increased 54% - in April 2012. Land Rover sales are growing faster than industry in the UK as well, supported by Defender and Evoque. High volume in March due to plate change caused mom decline in otherwise average April sales.
Russia JLR retail sales up 26% yoy
Retail sales were up 26% yoy in April - Jaguar sales up 33% yoy (down 14% mom) at 99 units, while Land Rover sales up 26% yoy (down 23% mom) at 1196 units. Russia, together with China, is proving to be the growth driver for global JLR sales growth.
Valuation
We believe JLR's performance will continue to drive Tata Motors' stock as it contributes 67% of revenue and 90% of profit. We value the standalone business at Rs83 pershare, 13x our FY13 core earnings estimate, and JLR at 8x FY13 earnings (after adjusting for capitalisation for product development) at Rs256 per share. We assign a 20% discount to investments and subsidiaries (Rs225 per share) to arrive at an SOTP-based target of Rs307. Maintain Buy.
