Tata Motors - Jaguar Land Rover - Monthly sales update - December 2012 - Angel Broking

Jaguar and Land Rover (JLR) posted a modest wholesale volume growth of 4.2% yoy to 32,282 units in December 2012, which was slightly lower than our estimates of 35,000 units. On a sequential basis, volumes declined 6.8% yoy primarily due to Christmas related holidays in December.

Jaguar sales posted a strong growth of 15.2% yoy (down 13% mom) led by the dispatches of the recently introduced all-wheel-drive XF and XJ and smaller engine versions of XF and XJ.

Land Rover sales on the other hand, posted a muted growth of 2.2% yoy (down 5.5% mom) to 26,838 units. The sales were impacted mainly due to the plant closure in December on account of Christmas holidays. Consequently, Evoque volumes were down ~10% on a mom basis to ~10,000 units.

We expect the volume performance to improve in 4QFY2013 led by ramp-up at the Halewood plant which would boost the production of Evoque and Freelander. Further dispatches of the new Range Rover and smaller engine and all-wheel-drive variants of XF and XJ will also aid volume growth going ahead.

Outlook and valuation: We retain our positive view on JLR and expect a 13-14% volume CAGR over FY2012-14E driven by Evoque and new product launches (Range Rover, Range Rover Sport, Jaguar XF Sportbrake and all-wheel drive and smaller engine options in the XF and XJ models). Further, a favorable market and product-mix and stable commodity prices will help mitigate raw-material cost pressures. We recommend an Accumulate rating on Tata Motors with a sum-of-the-parts (SOTP) target price of Rs.337.

Source : Equity Bulls

Keywords