Tata Motors (TELCO) - ICICI Directcontent.icicidirect.com/mailimages/IDirect_TataMotors_Q2FY17.pdf · Exhibit 3: Jaguar market mix movement Q2FY17 UK 23% N America China 26% 16% Europe

November 17, 2016

ICICI Securities Ltd | Retail Equity Research

Result Update

Strong product cycle in JLR to aid growth... • Tata Motors’ (TML) Q2FY17 results were below our estimates.

Consolidated revenues came in at | 65900 crore (up 7% YoY), below our estimates of | 66717 crore. JLR’s revenues came in at £5953 mn (up 23% YoY, 9% QoQ), almost in line with our estimate of £5959 mn. JLR’s wholesale volumes were at 139235 units (including China JV), up 19.3% YoY. Standalone came at | 10,322.5 crore (up 3.5% YoY, flat QoQ), against our estimates of | 10,965 crore. The miss on the estimates is on account of lower than estimated ASP

• JLR’s reported EBITDA margin for Q2FY17 was at 10.3%, lower than our estimate of 13.5%. However, margins were impacted by a charge of £58 million (mn) for revaluation of current assets/liabilities & £150 mn towards one-time provision for new customer loyalty programme. Adjusting for one time loyalty programme, EBITDA margin was at 12.9% vs. our estimate of 13.5%. Standalone EBITDA margin came in at 3.6% (down 454 bps YoY, 305 bps QoQ) against our estimate of 6%. EBITDA margins were lower than our estimates due to gross margin contraction QoQ due to poor product mix

• Consequently, JLR reported a PAT of £244 mn vs. our estimate of £341 mn while standalone loss was at | 630.8 crore vs. our estimated PAT of | 99.5 crore

JLR growth story intact In FY16, JLR’s retail volumes grew 13% YoY to 521,571 units, with growth in regions like UK (24%), North America (27%) & Europe (42%) offset by a decline of 16% in China. Going ahead, we expect JLR’s profit to grow at a CAGR of 18% on the back of 1) strong product cycle (recently launched XE & F-Pace and Land Rover will recover in H2FY17 with the launch of Evoque Convertible, new Discovery in Q4FY17E, midsize Range Rover (RR) in mid-FY18 & mid-cycle refresh of RR/RR Sport 2) favourable foreign exchange (functional currency of JLR being GBP), depreciated GBP will benefit JLR in terms of revenue/margins once hedge & spot converge 3) long term benefit of modular strategy - more models on fewer platforms will reduce cost, 4) ramp up in China JV and 5) new production capacity in Slovakia Standalone business-near term challenge The recent demonetisation event will adversely impact domestic volumes in the short term. Although finance penetration in commercial vehicle segment is high (>95%), near term adverse impact will be felt as working capital of most fleet operators is cash based and will impact demand. However, volumes are expected to grow in Q4FY17 on the back of pre-buying due to implementation of emission norms on April 17. We expect growth in FY18 on the back of growth in economic activity & higher infrastructure spend. On the PV side, TML plans to launch two models per year till 2020. Overall, we expect standalone volumes to grow 15%, 18% for FY17E, FY18E, respectively. Long term story intact We remain positive on sustained earnings growth for the JLR business as the product pipeline grows and market share increases across geographies. We value the stock on an SOTP basis, with JLR (ex-China JV) at 3.8x EV/EBIDTA basis contributing ~| 520/share while the domestic business contributes | 52/share. Inclusive of other subsidiaries, we arrive at a target price of | 595.

Rating matrix Rating : BuyTarget : | 595Target Period : 12 monthsPotential Upside : 26%

What’s Changed? Target Changed from | 660 to | 595EPS FY17E Changed from | 57.6 to | 35.5EPS FY18E Changed from | 67.7 to | 61.3Rating Unchanged

Quarterly Performance

Q2FY17 Q2FY16 YoY (%) Q1FY17 QoQ (%)Revenue 65,900.4 61,524.0 7.1 65,895.0 0.0EBITDA 7,024.5 6,518.9 7.8 8,484.1 -17.2EBITDA (%) 10.7 10.6 6 bps 12.9 -222 bpsPAT 848.2 -1,740.2 -148.7 2,260.4 -62.5

Key Financials | Crore FY15E FY16E FY17E FY18ENet Sales 260,734 272,646 285,785 343,767 EBITDA 42,114 41,851 39,479 55,575 Net Profit 13,986 12,638 12,060 20,827 EPS (|) 41.2 37.2 35.5 61.3

Valuation summary

FY15E FY16E FY17E FY18EP/E (x) 11.5 12.7 13.3 7.7 Target P/E (x) 14.5 16.0 16.8 9.7 EV/EBITDA (x) 4.2 3.9 4.1 2.9 P/BV (x) 2.8 1.9 1.6 1.3 RoNW (%) 24.9 15.3 11.7 16.8 RoCE (%) 22.8 17.0 12.9 18.3

Stock data Particular AmountMarket Capitalization | 161291 CroreTotal Debt (FY16) | 63099.9 CroreCash and Investments (FY16) | 53707.7 CroreEV (FY16) | 163158.9 Crore52 week H/L (|) 593 / 266Equity capital (| crore) | 679.1 CroreFace value (|) | 2

Price performance (%)

1M 3M 6M 12MTata Motors Ltd -17.6 -9.7 16.7 14.5M&M Ltd -8.8 -14.3 -6.0 -3.2Maruti Suzuki India Ltd -12.3 2.6 28.6 7.4

Tata Motors (TELCO) | 474

Research Analyst

Nishit Zota

[email protected]

Vidrum Mehta

[email protected]

ICICI Securities Ltd | Retail Equity Research Page 2

Variance analysis- Consolidated Q2FY17 Q2FY17E Q2FY16 YoY (%) Q1FY17 QoQ (%) Comments

Total Operating Income 65,900 66,717 61,524 7.1 65,895 0.0 Consolidated revenues came in below estimates as standalone revenues were below estimates due to lower than estimated ASPs

Raw Material Expenses 39,276 38,892 37,824 3.8 39,091 0.5Employee Expenses 6,794 7,257 6,898 -1.5 7,466 -9.0Other expenses 17119 11290 13597 25.9 15039 13.8

EBITDA 7,024.5 9,278 6,518.9 7.8 8,484 -17.2EBITDA Margin (%) 10.7 13.9 10.6 6 bps 12.9 -222 bps Margins came in lower due to lower than estimated JLR margins & standalone

margins. The reported JLR margins were impacted due to a charge of £58 million for revaluation of current assets/liabilities & £ 150 million towards one time provision for new customer loyalty programme. Standalone margins came down sequentially due to gross margin contraction QoQ mainly due to a poor product mix

Depreciation 4454.0 4489.8 4361.8 2.1 4550.8 -2.1Interest 1025 1127 1223 -16.2 1169 -12.4Product Development expenditure 742.0 824.0 843.1 -12.0 871.1 -14.8Tax 425 773 -429 -199.0 720 -41.0PAT 848.2 2289.1 -1740.2 -148.7 2260.4 -62.5 PAT was lower due to lower than estimated EBITDA marginsEPS (Diluted) 2.5 7.8 -5.2 -148.1 6.7 -62.5Key MetricsJLR sales ( mn GBP) 5953 5959 4831 23.2 6594 -9.7JLR margins (%) 10.3 13.5 12.2 -186 bps 13.7 -336 bps The reported JLR margins was impacted by a charge of £ 58 million for

revaluation of current assets/liabilities & £ 150 million towards one-time provision for new customer loyalty programme. Adjusting for the one-time loyalty programme, EBITDA margins were at 12.9%

JLR PAT (mn GBP) 244 341 -92 -365.2 472 -48.3 PAT was lower due to lower than estimated JLR marginsDomestic revenues (| crore) 10322.5 10964.9 10693.7 -3.5 10319.6 0.0 Miss on estimates was due to lower than estimated ASPDomestic margins (%) 3.6 6.0 7.3 -366 bps 6.7 -305 bps Below estimates on account of gross margin contraction due to poor product mix

Domestic PAT (| crore) -630.8 99.5 -288.8 -118.4 25.7 -2,549.6 PAT came in below estimates due to lower than estimated margins

Source: Company, ICICIdirect.com Research Change in estimates

(| Crore) Old New % Change Old New % Change CommentsRevenue 311,759 289,535 -7.1 380,161 348,128 -8.4EBITDA 49,298 39,479 -19.9 60,747 55,575 -8.5EBITDA Margin (%) 15.8 13.6 -216 bps 16.0 16.0 -2 bps Operating margin estimates of JLR reduced post H1FY17 performance. Even

standalone stimates reduced as Q3FY17 will be a subdued quarterPAT 19,550 12,060 -38.3 23,001 20,827 -9.5EPS (|) 57.6 35.5 -38.3 67.7 61.3 -9.4 EPS reduced due to the decline in revenue & margin estimate

FY17E FY18E

Source: Company, ICICIdirect.com Research Assumptions

CommentsUnits FY14 FY15E FY16E FY17E FY18EJaguar Land Rover 429,861 466,479 544,085 590,174 679,471 Almost maintained the volume estimatesJaguar 79,307 76,496 102,106 166,499 204,984Land Rover 350,554 389,983 441,979 423,675 474,487China JV N.A. 683 34,751 70,485 86,569Avg ASP/vehicle (£) 45,117.7 46,847.4 41,025.8 40,646.4 43,728.9RM/Unit (GBP) 27758 28265 24162 25015 26083Capitalised expenses (mn £) 1,030 1,158 1,242 1,508 1,674IndiaM&HCV 121,937 142,490 176,493 184,504 212,179 Although FY18 growth will remain intact, FY17 growth will be adversely impacted due to high

base and recent demonetisation impactLCV 299,252 222,272 204,741 227,849 261,359 LCV volumes will grow due to overall recovery in that segmentPV 145,428 137,574 130,478 174,461 217,716 New launches will spur growth

Source: Company, ICICIdirect.com Research


Company Analysis Revenues to remain upbeat as JLR grows! We expect consolidated revenues to grow at ~12.4% CAGR in FY16-18E to ~| 348128 crore driven by JLR’s revenue CAGR of ~15.7% in the same period at ~£29.7 billion (~ | 2,66,653 crore). On the India side, we expect revenues to rise at 18.8% CAGR to ~| 59,809 crore by FY18E. Exhibit 1: We build revenue growth at 12.4% CAGR in FY16-16E

165,655188,818

232,861263,159 275,561 289,535

348,128

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FY12 FY13 FY14 FY15E FY16E FY17E FY18E

CAGR 12% FY16-18E


JLR product story to continue in coming years! The management has lowered its initial capex of £3.75 billion for FY17E. It is towards new products, technology & expansion of manufacturing capacity. The management expects capex to remain in the range of 15-17% of sales in the medium term on significant investments in platform development. Thus, we believe the roadmap for new product launches (Evoque 2016 MY, XJ 2016MY, new XF, F-PACE) and refreshes over the next four years looks clear. We expect the China JV to ramp up through FY17E, FY18E. Exhibit 2: JLR volumes trend

20.4 21.5 19.6 17.8 19.1 20.1 21.2 21.7 27.0 32.2 34.6 43.6

96.0 95.6 95.6 86.2103.1 105.1 93.3 95.1

123.4130.2

99.895.6

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Jaguar LandRover



Exhibit 3: Jaguar market mix movement

Q2FY17

UK23%

N America26%China

16%

Europe22%

ROW13%

Q2FY16

UK36%

N America16%

China11%

Europe23%

ROW14%

Source: Company press release, ICICIdirect.com Research Retail sale volumes referred

Exhibit 4: Land Rover market mix movement

Q2FY17

UK21%

N America20%

China22%

Europe21%

ROW16%

Q2FY16

ROW18%

Europe27%

China19%

N America18%

UK18%

Source: Company press release, ICICIdirect.com Research Retail sale volumes referred

Exhibit 5: Product & geography mix

74.787.0

12.0

6.60.30.013.0 6.3

0

20

40

60

80

100

Q2FY16 Q2FY17

(%)

XF/XE XJ XK/F-Pace F-Type

6.4 0.4

32.4 41.2

0.0 0.0

17.012.4

22.225.9

22.0 20.1

0

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40

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Q2FY16 Q2FY17

(%)

Defender Discovery Freelander Evoque Range Rover RRSport

Source: Company press release, ICICIdirect.com Research retail volumes referred RR ~ Range Rover


EBITDA margins to trend higher Tata Motors remains a unique case that in India has a combination of high leverage CV business along with a financial dragger on the PV side. On the other hand, on the global front with JLR, it has been one of the most profitable luxury carmakers in the world. The variation is mind boggling in itself with the number of levers towards EBITDA ranging from financial leverage to operating leverage to FX to product mix as well as market mix. Thus, in a nutshell, it remains a company that can have large variations from analyst estimates on a quarterly basis. The China JV reported a strong financial performance despite being in a ramp up phase. The China JV’s contribution towards FY16 PAT was £64 million. With such profitability and operating leverage kicking in once the ramp up happens, the margin is likely to trend upwards. Thus, we expect JLR’s EBITDA margins to increase to 15.9% for FY18E. In the domestic business, we expect operational positivity to emerge (7.9% in FY18E).

Exhibit 7: Margins trend on standalone and JLR

9.9

8.1

6.5 6.2

7.9

4.8

-1.4-2.2

17.5 18.9

14.213.1

15.2

15.0

14.8

15.9

-4

-2

0

2

4

6

8

10

12

FY11 FY12 FY13 FY14 FY15E FY16E FY17E FY18E

(%)

0

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)

EBITDA margins (Standalone) EBITDA margins (JLR)


Exhibit 6: Consolidated EBITDA margins to decline 26

,569 37

,368

42,1

14

41,8

51 55,5

75

39,4

79

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16.0 16.0

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FY13 FY14 FY15E FY16E FY17E FY18E

(| c

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16

17

(%)



Return ratios to increase to reflect rising margins Return ratios witnessed a decline since FY12 primarily due to the significant investment in both JLR and domestic business, the latter of which failed badly in generating strong returns. Going ahead, we expect high JLR margins to positively impact return ratios. Return ratios in FY16E appear lower on account of the recent rights issue, which led to an equity dilution of ~5%. At the consolidated level, we expect PAT to grow at 28% CAGR to | 20,827 crore in FY18E. Exhibit 8: Returns ratios trend

21.721.3

22.8

17.0

12.9

18.3

24.9

15.3

11.7

16.8

10

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25

30

FY14 FY15E FY16E FY17E FY18E

(%)

RoCE RoE


Exhibit 9: Trend in net profit

9,86

1 13,9

44

13,9

86

12,6

38

12,0

60

20,8

27

0

5000

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25000

FY13 FY14 FY15E FY16E FY17E FY18E

(| c

rore

)

Source: Company press release, ICICIdirect.com Research


Outlook and valuation Tata Motors’ business has been increasingly polarised towards the global business of JLR. We believe that with JLR’s strong product line-up and planned product refreshes, the market share march is likely to continue. We remain positive on sustained earnings growth for the JLR business as the product pipeline grows and market share increases across geographies. We value the stock on an SOTP basis, with JLR on 4x EV/EBIDTA basis contributing ~| 520/share (exc. JV) while the domestic business contributes | 52/share. Inclusive of other subsidiaries, we arrive at a target price of | 595. Exhibit 10: Valuation on SOTP method

Parameters Basis Multiple Per ShareTata Motors Core business FY18E EPS 6 9 52JLR FY18E Adj EV/EBITDA 26,353 3.8 492China JV @50% stake FY18E EPS 7.0 8.0 28

Subsidiary valuation

Tata Daewoo FY18E EPS 0.3 8.0 3

Tata Motor Finance FY18E Adj BV 7.8 1.0 8

Tata Technologies FY18E EPS 1.4 10.0 14Value of investments 0.1x BV of unquoted invst 3

Value of subsidiaries, investments 29

Value post discount Holding co discount @ 20% 23Total value per share 595TML DVR inferred target value @ 30% discount 415


Exhibit 11: Valuation Revenues Growth EPS Growth PE EV/EBITDA RoNW RoCE

(| cr) (%) (|) (%) (x) (x) (%) (%)FY15E 260,734 38.9 41.2 41.8 14.1 4.9 24.9 22.8 FY16E 272,646 4.6 37.2 (9.6) 15.6 4.7 15.3 17.0 FY17E 285,785 4.8 35.5 (4.6) 16.3 4.9 11.7 12.9 FY18E 343,767 20.3 61.3 72.7 9.5 3.5 16.8 18.3



Recommended History vs. consensus

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Oct-16Jul-16May-16Mar-16Dec-15Oct-15Jul-15May-15Feb-15Dec-14

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Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research Key events Date EventJan-08 Much touted "Nano" is unveiled at Auto Expo along with new 1 tonne LCV's "ACE". Jun-08 Acquisition of Jaguar & Land Rover for $2.3 billionJan-09 Tata Motors posts losses as domestic economy sales weaken and global foray causes dragJul-09 Tata Motors' Q1FY10 results rise 58% YoY beat estimates ,early signs of recovery of economy. Nano dispathces rise to 9,000 unitsMay-10 JLR turns profitable for Tata Motors with FY10 PAT of £32 million, big earnings beatDec-10 Nano sales fall 85% to 509 units on unavailability of vehicle financing options amid fire incidents Jun-11 JLR announces £1.5 billion capex spends, Tatat Motors CDS rises as European region problems flare upOct-11 JLR launches its path breaking mini-SUV "Evoque"Aug-12 Karl Slym becomes MD of Tata Motor's domestic businessJan-12 JLR reports highest rise in sales since June 2010 on the back of "Evoque"May-12 JLR reports tax credits to boost profit amid weaker than estiimated JLR marginsOct-12 Siam cuts India auto sales forecast second time in a yearAug-13 JLR reports stronger than estimated margins in Q1FY14 even as domestic business struggles in lossesFeb-14 JLR outlines timelines for new engine plant, new launches, China JV

Source: Company, ICICIdirect.com Research Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m)1 Tata Group of Companies 30-Sep-16 0.32 936.8 0.002 Ewart Investment, Ltd. 20-Sep-16 0.2698 779.0 778.973 Life Insurance Corporation of India 30-Sep-16 0.052 150.1 -55.654 GIC Private Limited 30-Sep-16 0.0165 47.6 -7.155 ICICI Prudential Life Insurance Company Ltd. 30-Sep-16 0.0156 45.1 -4.426 BlackRock Institutional Trust Company, N.A. 31-Oct-16 0.0145 41.9 0.327 Invest AD 30-Sep-16 0.0139 40.0 0.888 The Vanguard Group, Inc. 30-Sep-16 0.0098 28.3 -0.369 Dimensional Fund Advisors, L.P. 30-Sep-16 0.0084 24.1 0.0110 Norges Bank Investment Management (NBIM) 31-Dec-15 0.008 23.0 16.73

(in %) Mar-15 Jun-15 Sep-15 Dec-15 Mar-16Promoter 34.3 34.4 34.4 33.0 33.0FII 47.9 48.0 42.3 41.8 42.0DII 11.3 11.4 16.8 17.8 17.8Others 6.4 6.3 6.5 7.4 7.2

Source: Reuters, ICICIdirect.com Research Recent Activity

Investor name Value Shares Investor name Value SharesEwart Investment, Ltd. +6,260.8M +779.0M Life Insurance Corporation of India -447.3M -55.7MBlackRock Asset Management North Asia Limited +35.0M +4.4M Capital World Investors -90.6M -13.3MFIL Investment Management (Hong Kong) Limited +21.2M +2.6M GIC Private Limited -57.5M -7.2MHDFC Asset Management Co., Ltd. +12.5M +1.6M JPMorgan Asset Management U.K. Limited -35.4M -5.2MWilliam Blair Investment Management, LLC +10.4M +1.5M ICICI Prudential Life Insurance Company Ltd. -35.6M -4.4M

Buys Sells

Source: Reuters, ICICIdirect.com Research


.

Financial summary Profit and loss statement | Crore

(Year-end March) FY15E FY16E FY17E FY18ETotal operating Income 263,159 275,561 289,535 348,128

Growth (%) 13.0 4.7 5.1 20.2Raw Material Expenses 159,920 162,419 168,858 207,058Employee Expenses 25,549 29,199 28,881 34,613Marketing Expenses 35,576 65,032 72,416 50,881Capitalised Expenses 0 -22,940 -20,098 0Total Operating Expenditure 221,045 233,710 250,056 292,553EBITDA 42,114 41,851 39,479 55,575

Growth (%) 12.7 -0.6 -5.7 40.8Product development Expenses 2875 3480 3373 3907Depreciation 13389 17014 18349 22312Interest 4861 4624 4087 3826Other Income 899 982 899 1200PBT 21887 17715 14567 26730Minority Interest 87 106 60 142Total Tax 7643 2873 4024 6950PAT 13,986 12,638 12,060 20,827

Growth (%) 0.3 -9.6 -4.6 72.7EPS (|) 41.2 37.2 35.5 61.3


Cash flow statement | Crore (Year-end March) FY15E FY16E FY17E FY18EProfit after Tax 13,986.3 12,638.4 12,060.3 20,826.8

Add: Depreciation 13,389 17,014 18,349 22,312(Inc)/dec in Current Assets 1,015 -7,676 2,947 -19,679Inc/(dec) in CL and Provisions 4,472 12,465 -5,106 12,271Others 0 0 0 0CF from operating activities 32,862 34,441 28,250 35,731

(Inc)/dec in Investments -4,650 -5,129 -2,020 -2,020(Inc)/dec in Fixed Assets -28,436 -33,442 -36,500 -36,500Others 11,773 -1,226 360 642CF from investing activities (21,312) (39,797) (38,160) (37,878)

Issue/(Buy back) of Equity 0 35 0 0Inc/(dec) in loan funds 14,257 -6,112 -3,000 -3,000Dividend paid & dividend tax 0 -79 -396 0Inc/(dec) in Sec. premium 0 0 0 0Others -23,328 13,816 8,512 0CF from financing activities (9,071) 7,660 5,116 (3,000)

Net Cash flow 2,479 2,305 -4,794 -5,147Opening Cash 29,711 32,190 34,495 29,701Closing Cash 32,190 34,495 29,701 24,553


Balance sheet | Crore (Year-end March) FY15E FY16E FY17E FY18ELiabilities

Equity Capital 644 679 679 679Reserve and Surplus 55,618 81,993 102,170 122,996Total Shareholders funds 56,262 82,672 102,849 123,675Total Debt 69,211 63,100 60,100 57,100Deferred Tax Liability 1,343 3,166 3,166 3,166Long term provisions 15134 11817 12317 12817Minori ty Interest / Others 9,649 10,560 11,620 12,762Total Liabi li ties 151,600 171,315 190,052 209,520

AssetsGross Block 162,261 196,366 232,866 269,366Less: Acc Depreciation 83,101 100,778 119,127 141,439Net Block 79,160 95,588 113,738 127,926Capital WIP 33,263 33,263 33,263 33,263Total Fixed Assets 112,423 128,851 147,001 161,189Investments 15,337 20,466 22,486 24,506Inventory 29,272 33,399 32,371 44,859Debtors 12,580 12,990 13,311 16,011Loans and Advances 10,746 14,757 11,975 16,056Other Current Assets 2,948 2,075 2,619 3,028Cash 32,190 34,495 29,701 24,553Total Current Assets 87,736 97,717 89,976 104,507Creditors 57,407 63,633 62,638 73,462Provisions 6,036 8,702 8,566 9,532Total Current Liabilities 87,132 99,597 94,490 106,761Net Current Assets 604 -1,880 -4,514 -2,254Deferred Tax Asset 2,733 2,726 2,726 2,726Application of Funds 151,600 171,315 190,052 209,520


Key ratios (Year-end March) FY15E FY16E FY17E FY18EPer share data (|)

EPS 41.2 37.2 35.5 61.3Cash EPS 80.6 87.3 89.6 127.0BV 165.7 243.5 302.9 364.2DPS 0.0 0.2 1.0 0.0Cash Per Share 94.8 101.6 87.5 72.3Operating Ratios

EBITDA Margin (%) 16.2 15.4 13.8 16.2PBT / Net sales (%) 8.4 6.5 5.1 7.8PAT Margin (%) 2.8 7.6 8.2 5.2Inventory days 39.6 41.9 42.0 41.0Debtor days 17.6 17.4 17.0 17.0Creditor days 80.4 85.2 80.0 78.0Return Ratios (%)

RoE 24.9 15.3 11.7 16.8RoCE 22.8 17.0 12.9 18.3RoIC 39.9 29.4 20.0 25.9Valuation Ratios (x)

P/E 14.1 15.6 16.3 9.5EV / EBITDA 4.9 4.7 4.9 3.5EV / Net Sales 0.8 0.7 0.7 0.6Market Cap / Sales 0.7 0.7 0.6 0.5Price to Book Value 3.5 2.4 1.9 1.6Solvency Ratios

Debt/EBITDA 1.6 1.5 1.5 1.0Debt / Equity 1.2 0.8 0.6 0.5Current Ratio 1.0 1.0 1.0 1.0Quick Ratio 0.6 0.6 0.6 0.7



ICICIdirect.com coverage universe (Auto & Auto Ancillary) CMP M Cap(|) TP(|) Rating (| Cr) FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E

Amara Raja (AMARAJ) 930 1025 Hold 15884 28.5 31.2 39.4 32.6 29.8 23.6 21.1 18.9 15.1 31.2 27.5 28.9 23.2 21.0 21.9Apollo Tyre (APOTYR) 186 225 Buy 9376 21.5 20.7 22.5 8.7 9.0 8.3 5.4 6.5 6.1 20.5 15.3 14.7 17.7 15.6 14.7Ashok Leyland (ASHLEY) 79 105 Buy 22388 2.5 5.9 6.7 31.2 13.4 11.9 10.8 8.3 6.9 23.0 27.4 28.2 13.1 24.8 23.2Bajaj Auto (BAAUTO) 2563 3300 Buy 74151 126.2 153.0 187.3 22.4 18.5 15.1 16.7 14.3 11.5 35.9 34.4 34.9 29.7 30.5 31.2Balkrishna Ind. (BALIND) 960 925 Hold 9278 58.7 59.6 71.6 15.1 14.8 12.4 8.8 8.2 6.9 19.5 19.8 21.6 20.3 19.8 21.6Bharat Forge (BHAFOR) 903 1000 Buy 21050 28.0 29.6 44.5 32.3 30.6 20.3 15.4 15.5 11.6 16.5 14.9 19.7 18.3 16.9 21.6Bosch (MICO) 19050 24000 Buy 59817 410.2 599.5 600.2 50.9 34.8 34.8 33.1 33.4 23.9 15.1 23.8 20.4 17.8 19.7 24.4Eicher Motors (EICMOT) 20946 28000 Buy 56575 471.5 653.0 854.2 44.4 32.1 24.5 27.2 21.4 16.3 42.4 42.0 41.5 36.9 37.1 35.4Escorts (ESCORT) 300 360 Hold 3579 7.5 14.0 24.7 47.6 25.4 14.5 27.2 14.6 9.1 4.6 10.6 15.5 4.8 8.4 13.1Exide Industries (EXIIND) 179 240 Buy 15241 7.3 8.5 10.3 24.5 21.2 17.4 15.8 13.6 11.0 18.7 19.7 22.3 14.0 14.7 16.1Hero Mototcorp (HERHON) 3110 3675 Buy 57313 119.5 156.9 188.2 24.0 18.3 15.2 13.2 11.2 10.1 45.9 50.4 48.7 36.5 39.4 38.7JK Tyre & Ind (JKIND) 118 145 Buy 2671 21.0 17.7 26.9 5.6 6.6 4.4 4.6 4.5 3.7 21.7 16.7 18.0 27.2 19.2 23.1M&M (MAHMAH) 1221 1470 Buy 72355 48.3 64.7 75.9 25.3 18.9 16.1 17.7 11.0 9.0 14.5 15.5 17.4 14.4 15.5 16.0Mahindra CIE (MAHAUT) 179 225 Buy 5791 6.2 10.6 13.1 29.0 16.9 13.7 12.5 9.1 7.3 7.3 11.0 12.1 8.5 12.3 14.1Maruti Suzuki (MARUTI) 4953 6765 Buy 149665 151.3 260.7 307.5 32.7 19.0 16.1 19.8 15.9 13.0 22.7 25.1 24.9 16.9 23.6 22.8Motherson (MOTSUM) 296 325 Hold 39121 9.6 12.8 16.0 30.7 23.1 18.5 13.3 10.2 8.1 19.9 26.3 30.5 30.0 30.9 30.4Tata Motors (TELCO) 474 595 Buy 173153 37.2 35.5 61.3 12.7 13.3 7.7 3.9 4.1 2.9 17.0 12.9 18.3 15.3 11.7 16.8Wabco India (WABTVS) 5120 6200 Buy 9728 107.7 138.8 167.4 47.5 36.9 30.6 32.9 25.1 20.5 19.4 20.3 20.0 22.4 24.2 23.7

Sector / CompanyRoE (%)EPS (|) P/E (x) EV/EBITDA (x) RoCE (%)



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Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093

[email protected]


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Documents

Tata Motors (TELCO) - ICICI Directcontent.icicidirect.com/mailimages/IDirect_TataMotors_Q2FY17.pdf · Exhibit 3: Jaguar market mix movement Q2FY17 UK 23% N America China 26% 16% Europe