Tata Motors (Q3 FY13)
India Infoline News Service | Mumbai |
We revise our 9-month target price to Rs313 as we roll-over to FY15.
CMP Rs296, Target Rs313, Upside 5.7%
Source: Company, India Infoline Research
Cost analysis (Consolidated)
Source: Company, India Infoline Research
JLR results table
- Consolidated net sales grew by a muted 1.8% yoy as JLR sales grew by a modest 1.5% owing to pressure on realizations and standalone sales plummeted 20.3% yoy owing to sharp fall in M&HCV volumes
- JLR OPM was at 14% was lower than ours and street estimates, a fall of 303bps yoy; the fall was driven by higher marketing spends, increase in employee costs and adverse currency movements
- OPM for standalone business at 1.4% was much lower than our expectation mainly on adverse product mix
- Volumes at JLR to improve in Q4 FY13 as deliveries of new Range Rover continue to ramp up
- Company has raised its guidance of capital expenditure at JLR from £2bn per annum to about £2.75bn
- Maintain Market Performer rating but revise earnings and target to factor in lower margins at JLR. Raise our 9-month price target to Rs313 as we rollover to FY15
| (Rs m) | Q3 FY13 | Q3 FY12 | % yoy | Q2 FY13 | % qoq |
| Net sales | 460,895 | 452,603 | 1.8 | 434,029 | 6.2 |
| Material costs | (269,658) | (270,956) | (0.5) | (246,775) | 9.3 |
| Purchases | (27,055) | (28,988) | (6.7) | (30,438) | (11.1) |
| Personnel costs | (43,529) | (32,072) | 35.7 | (40,191) | 8.3 |
| Other overheads | (59,214) | (48,360) | 22.4 | (58,015) | 2.1 |
| Operating profit | 61,438 | 72,227 | (14.9) | 58,611 | 4.8 |
| OPM (%) | 13.3 | 16.0 | (263) bps | 13.5 | (17) bps |
| Depreciation | (20,700) | (16,159) | 28.1 | (15,944) | 29.8 |
| Product development | (4,865) | (3,957) | 22.9 | (5,274) | (7.8) |
| Interest | (9,346) | (5,769) | 62.0 | (8,474) | 10.3 |
| Other income | 1,886 | 240 | 685.0 | 2,068 | (8.8) |
| PBT | 28,414 | 46,581 | (39.0) | 30,987 | (8.3) |
| Tax | (10,318) | (10,711) | (3.7) | (9,876) | 4.5 |
| Effective tax rate (%) | 36.3 | 23.0 | 31.9 | ||
| Other provisions | (85) | (172) | (50.4) | (262) | (67.6) |
| Adjusted PAT | 18,010 | 35,699 | (49.5) | 20,848 | (13.6) |
| Adj. PAT margin (%) | 3.9 | 7.9 | (398) bps | 4.8 | (90) bps |
| Extra ordinary items | (1,735) | (1,643) | 5.6 | (101) | 1,618.1 |
| Reported PAT | 16,275 | 34,056 | (52.2) | 20,747 | (21.6) |
| Ann. EPS (Rs) | 20.4 | 42.9 | (52.5) | 26.0 | (21.6) |
Cost analysis (Consolidated)
| As a % of net sales | Q3 FY13 | Q3 FY12 | bps yoy | Q2 FY13 | bps qoq |
| Material costs | 58.5 | 59.9 | (136) | 56.9 | 165 |
| Purchases | 5.9 | 6.4 | (53) | 7.0 | (114) |
| Personnel Costs | 9.4 | 7.1 | 236 | 9.3 | 18 |
| Other overheads | 12.8 | 10.7 | 216 | 13.4 | (52) |
| Total costs | 86.7 | 84.0 | 263 | 86.5 | 17 |
JLR results table
| (in £ mn) | Q3 FY13 | Q3 FY12 | yoy (%) | Q2 FY13 | qoq (%) |
| Jaguar wholesale volumes | 11,980 | 13,006 | (7.9) | 12,798 | (6.4) |
| Land Rover wholesale volumes | 76,678 | 65,287 | 17.4 | 71,951 | 6.6 |
| Total wholesale volumes | 88,658 | 78,293 | 13.2 | 84,749 | 4.6 |
| Realization (£/vehicle) | 42,906 | 47,884 | (10.4) | 38,797 | 10.6 |
| Net Sales | 3,804 | 3,749 | 1.5 | 3,288 | 15.7 |
| Expenses | (3,271) | (3,110) | 5.2 | (2,802) | 16.7 |
| Operating profit | 533 | 639 | (16.6) | 486 | 9.7 |
| OPM (%) | 14.0 | 17.0 | (303)bps | 14.8 | (77)bps |
| Depreciation | (169) | (136) | 24.3 | (119) | 42.0 |
| forex gain/(loss) | 11 | 14 | (21.4) | 67 | (83.6) |
| EBIT | 375 | 517 | (27.5) | 434 | (13.6) |
| Interest expense | 29 | (8) | - | (3) | - |
| PBT | 404 | 509 | (20.6) | 431 | (6.3) |
| Tax | (108) | (116) |
***Note: This is a
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