Tata Motors - Q1FY2014 Result Preview - Angel Broking

Tata Motors (TTMT) will be announcing its 1QFY2014 results today. On a standalone basis, we expect revenues to decline ~17% yoy to Rs. 8,782cr due to ~19% yoy decline in volumes. Led by lower volumes, higher levels of discounting and reduced operating leverage, we expect EBITDA margins to decline ~380bp yoy to 2.8% leading to a net loss of ~Rs. 270cr. Nonetheless, led by Jaguar and Land Rover (expected to post a strong revenue growth of ~15% yoy), TTMT's consolidated revenue is expected to register a healthy growth of 8.5% yoy to Rs. 46,989cr. On the consolidated front, we expect EBITDA margins to remain stable at 13.5%, backed by superior product and geography mix at JLR (JLR margins expected to improve 100bp yoy to 15.4%) and also due to softening of commodity prices. However, consolidated bottom-line (adjusted basis) is expected to remain flat yoy at Rs. 2,683cr due to a sharp increase in depreciation expense.

At the CMP of Rs. 287, the stock is trading at 6.9x FY2015E earnings. Currently, we have a Buy rating on the stock with a target price of Rs. 347.

Source : Equity Bulls

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