Tata Motors (Q2 FY13)

India Infoline News Service | Mumbai |

Tata Motors (Q2 FY13)

CMP Rs269, Target Rs280, Upside 4.1% 
  • Consolidated net sales increased by 20% yoy aided by robust 12.8% yoy growth in JLR and ~20% yoy depreciation in rupee against US$

  • JLR OPM was at 14.8% was better than ours and street estimates, a rise of 37bps yoy

  • OPM for standalone business at 5.2% was much lower than our expectation mainly on adverse product mix

  • Volumes at JLR to improve in Q3 FY13 as deliveries of new Range Rover commences

  • Cash flow and balance sheet strength at JLR continue to improve

  • Maintain Market Performer rating but revise earnings and target to factor in strong volume growth and better product mix in FY14. Raise our 9-month price target to Rs280

Result table (Consolidated)
(Rs m) Q2 FY13 Q2 FY12 % yoy Q1 FY13 % qoq
Net sales 434,029 361,975 19.9 433,236 0.2
Material costs (246,775) (213,349) 15.7 (248,355) (0.6)
Purchases (30,438) (28,040) 8.6 (29,139) 4.5
Personnel costs (40,191) (28,656) 40.3 (37,897) 6.1
Other overheads (58,015) (43,777) 32.5 (55,499) 4.5
Operating profit 58,611 48,154 21.7 62,346 (6.0)
OPM (%) 13.5 13.3 20 bps 14.4 (89) bps
Depreciation (15,944) (13,306) 19.8 (15,659) 1.8
Product development (5,274) (3,115) 69.3 (4,797) 9.9
Interest (8,474) (5,251) 61.4 (8,044) 5.3
Other income 2,068 608 239.9 2,386 (13.3)
PBT 30,987 27,091 14.4 36,232 (14.5)
Tax (9,876) (3,630) 172.0 (8,688) 13.7
Effective tax rate (%) 31.9 13.4   24.0  
Other provisions (262) (296) (11.3) (690) (62.0)
Adjusted PAT 20,848 23,165 (10.0) 26,854 (22.4)
Adj. PAT margin (%) 4.8 6.4 (160) bps 6.2 (140) bps
Extra ordinary items (101) (4,390) (97.7) (4,405) (97.7)
Reported PAT 20,747 18,775 10.5 22,449 (7.6)
Ann. EPS (Rs) 26.0 23.7 9.9 28.2 (7.6)
Source: Company, India Infoline Research

Cost analysis (Consolidated)
As a % of net sales Q2 FY13 Q2 FY12 bps yoy Q1 FY13 Bps qoq
Material costs 56.9 58.9 (208) 57.3 (47)
Purchases 7.0 7.7 (73) 6.7 29
Personnel Costs 9.3 7.9 134 8.7 51
Other overheads 13.4 12.1 127 12.8 56
Total costs 86.5 86.7 (20) 85.6 89
Source: Company, India Infoline Research

JLR results table
BSE 405.70 [4.50] ([1.10]%)
NSE 406.85 [3.30] ([0.80]%)

***Note: This is a NSE Chart

 

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(in £ mn) Q2 FY13 Q2 FY12 yoy (%) Q4 FY12 qoq (%)
Jaguar wholesale volumes 12,798 13,233 (3.3) 13,638 (6.2)
Land Rover wholesale volumes 71,951 52,449 37.2 72,120 (0.2)
Total wholesale volumes 84,749 65,682 29.0 85,758 (1.2)
Realization (£/vehicle) 38,797 44,380 (12.6) 42,422 (8.5)