Motilal Oswal Maintains Buy on Tata Motors

TATA MOTORS: Above estimates; volumes up 15% YoY (~11% MoM) to 75,423 units, led by recovery in Nano volumes

Total volumes grew by 15% YoY (~11% MoM) to 75,423 units (vs est 72,000 units), driven by recovery in Nano volumes. However, CV volumes disappointed.

Domestic CV portfolio grew by 12% YoY (~4% MoM decline) to 40,263 units (vs est 41,150 units). M&HCV volumes grew by 5% YoY (5% MoM decline).

Domestic car volumes grew by 13.4% YoY (~52% MoM), to 25,750 units (vs est 21,500 units), driven by strong recovery in Nano volumes.

Domestic UV volumes continue to recover with growth of 26% YoY (~46% MoM) to 4,462 units. Volumes will see boost from recently launched Aria.

CV segment volumes is picking up. The company has further increased prices of CV's by Rs1,500-Rs30,000 and for PVs (ex-Nano) by Rs3,000-Rs15,000

The stock trades at 7.3x FY12E consolidated EPS and 11x FY12E normalized consolidated EPS (adj for R&D capitalization). The DVR share trades at 4.5x FY12 consol EPS and 6.8x FY12 consol normalized EPS. Maintain Buy, with our preference for DVR shares over ordinary shares.

Source : Equity Bulls

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