Tata Motors (Q1 FY14)

Consolidated net sales grew by 8% yoy as 14% yoy fall in standalone sales was more than offset by 12% yoy jump in JLR sales

Aug 08, 2013 04:08 IST India Infoline News Service

CMP Rs279, Target Rs302, Upside 8.3%

  • Consolidated net sales grew by 8% yoy as 14% yoy fall in standalone sales was more than offset by 12% yoy jump in JLR sales
  • Growth in JLR revenues was driven by 8.6% yoy rise in volumes and 3.7% yoy increase in realizations
  • JLR OPM was at 16.5% much ahead of ours and street estimates, a surge of 199bps yoy; the gains were driven by favorable currency movements and better product mix
  • OPM for standalone business at 1.2% was lower than our expectation of 1.9% mainly on back of operating de-leverage
  • JLR paid out a dividend of £150mn to Tata Motors
  • Maintain Market Performer rating with a revised 9-month price target of Rs302
Result table (Consolidated)
(Rs m) Q1 FY14 Q1 FY13 % yoy Q4 FY13 % qoq
Net sales 467,847 433,236 8.0 560,016 (16.5)
Material costs (267,463) (248,355) 7.7 (320,902) (16.7)
Purchases (21,392) (29,139) (26.6) (30,889) (30.7)
Personnel costs (44,612) (37,897) 17.7 (44,224) 0.9
Other overheads (66,846) (55,499) 20.4 (80,707) (17.2)
Operating profit 67,533 62,346 8.3 83,294 (18.9)
OPM (%) 14.4 14.4 4 bps 14.9 (44) bps
Depreciation (23,477) (15,659) 49.9 (23,391) 0.4
Product development (5,341) (4,797) 11.3 (5,279) 1.2
Interest (9,482) (8,044) 17.9 (9,670) (1.9)
Other income 1,823 2,386 (23.6) 1,775 2.7
PBT 31,056 36,232 (14.3) 46,729 (33.5)
Tax (11,642) (8,688) 34.0 (8,827) 31.9
Effective tax rate (%) 37.5 24.0 18.9
Other provisions / minority etc (367) (690) (46.7) 1,338 (127.5)
Adjusted PAT 19,047 26,854 (29.1) 39,240 (51.5)
Adj. PAT margin (%) 4.1 6.2 (213) bps 7.0 (294) bps
Extra ordinary items (1,786) (4,405) (59.4) 215 (932.8)
Reported PAT 17,261 22,449 (23.1) 39,455 (56.3)
Ann. EPS (Rs) 21.8 28.2 (22.7) 49.5 (56.0)
Source: Company, India Infoline Research

Cost analysis (Consolidated)
As a % of net sales Q1 FY14 Q1 FY13 bps yoy Q4 FY13 bps qoq
Material costs 57.2 57.3 (16) 57.3 (13)
Purchases 4.6 6.7 (215) 5.5 (94)
Personnel Costs 9.5 8.7 79 7.9 164
Other overheads 14.3 12.8 148 14.4 (12)
Total costs 85.6 85.6 (4) 85.1 44
Source: Company, India Infoline Research

JLR results table
(in £ mn) Q1 FY14 Q1 FY13 yoy (%) Q4 FY13 qoq (%)
Jaguar wholesale volumes 18,577 11,774 57.8 21,163 (12.2)
Land Rover wholesale volumes 72,043 71,678 0.5 95,177 (24.3)
Total wholesale volumes 90,620 83,452 8.6 116,340 (22.1)
Realization (£/vehicle) 45,211 43,594 3.7 43,433 4.1
Net Sales 4,097 3,638 12.6 5,053 (18.9)
Expenses (3,422) (3,111) 10.0 (4,197) (18.5)
Operating profit 675 527 28.1 856 (21.1)
OPM (%) 16.5 14.5 199bps 16.9 (46)bps
Depreciation (202) (121) 66.9 (213) (5.2)
Forex gain/(loss) (30) (67) (55.2) (118) (74.6)
EBIT 443 339 30.7

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