Monthly sales update on Tata Motors - Jaguar Land Rover - Angel Broking

Monthly sales update on Tata Motors - Jaguar Land Rover with an Accumulate recommendation and a Target Price of Rs. 410 (12 months).

Jaguar and Land Rover (JLR) registered better-than-expected wholesale volume growth of 15.3% yoy (10.5% mom) to 39,956 units for November 2013. The performance was driven by the success of new launches and robust growth across the world markets, specifically, China and the US.

Jaguar reported a 7.9% yoy growth to 6,753 units driven by the incremental volumes from the F-type and healthy growth in the XF model.

Land Rover posted a robust growth of 17% yoy (13.9% mom) to 33,203 units led by continued momentum in Range Rover Evoque and aided further by the ramp-up of the new Range Rover and the new Range Rover Sport.

We expect headwinds in the standalone business to continue in FY2014 due to weak macro-economic environment, which is expected to continue impacting domestic volumes. Nevertheless, we expect JLR to sustain its strong performance driven by continued momentum in the global luxury vehicle market, success of the recently launched models and strong product launch pipeline. We are building in an ~13% volume CAGR for JLR with an EBITDA margin improvement of 170bp over FY2013-15E, driven by superior product mix and favourable geography mix. We retain our positive view on TTMT and maintain our Accumulate rating on the stock with a SOTP target price of Rs. 410.

Source : Equity Bulls

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