Tata Motors - Back on track! - IDBI Capital

- JLR wholesale volumes for November'12 were strong at 34,649 units were up 19%/24% YoY/MoM, much higher than our & street estimates led by continued demand across all markets apart from the US, which was largely impacted by planned introduction of new variants across models (US sales down 7% YoY). JLR retail volumes were up 14%/19% to 29.9k units.

- Jaguar volumes were strong up 18%/87% YoY/MoM to 6,260 units, surpassing the 6k mark after more than two years.

- Land Rover volumes were up 19%/16% YoY/MoM to 28,389 units led by continued strong traction from Evoque.

- Volume performance for peers like BMW, Mercedes and Audi was robust.

- In case of BMW, Europe witnessed a growth of 10% YoY while US saw a strong growth of 39% YoY. China was up 62% YoY whereas Asia was up 49% YoY.

- Mercedes volumes at 120.3k units were up 6%/10% YoY/MoM. Western Europe was up 3% YoY with Germany and Asia Pacific remaining flat while US was up 13%. Japan registered a growth of 16% while China was down 7%.

- Audi volumes at 123.6k units were up 11%/flat YoY/MoM. Overall Europe sales were down 2%. Germany/UK/Belgium/Russia registered a YoY growth of 4%/8%/14%/83% respectively while France/Italy/Spain saw de-growth of 11%/19%/14%. US grew 24% YoY while China and India witnessed strong growth of 26% and 89% respectively.

We continue to be positive on Tata Motors and see any dip as an opportunity to buy, as we expect new Range Rover momentum to build as it starts dispatches to different geographies, which will boost JLR's profitability as well. In addition, JLR has a strong product pipeline in the form of new RR Sport, F-Type, variants of existing models and small Jag over the next 2 years. Reiterate BUY with SOTP of Rs309.

Source : Equity Bulls

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