Result Update: Tata Motors (TAMO)– BUY – TP Rs.539 - Kotak

TAMO's 4QFY17 results was better than our and street expectation. Standalone business continued to report losses, on expected lines. JLR's performance improved QoQ and was better than expected. While results were lower YoY, there was substantial improvement over 3QFY17. Despite growth in volumes, we expect the standalone business to continue to report losses in FY18/FY19 - though the quantum of loss is expected to come down. On the back of healthy demand across key geographies and new products, JLR's volume growth outlook remains positive. Company indicated that JLR's EBITDA margin in FY18 could witness pressure. Assuming current GBP rate remains unchanged, hedging losses will likely start reducing from 4QFY18 and FY19 margins can witness strong expansion. We revise our FY18 estimates lower and introduce FY19 estimates. We upgrade the stock to BUY (ACCUMULATE earlier) with revised price target of Rs539 (earlier Rs507).

Shares of TATA MOTORS LTD. was last trading in BSE at Rs.475.45 as compared to the previous close of Rs. 469.45. The total number of shares traded during the day was 1058632 in over 10006 trades.

The stock hit an intraday high of Rs. 478 and intraday low of 465. The net turnover during the day was Rs. 501981510.

Source : Equity Bulls

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