EUR 120.00 For Business Accounts Only

MOSL: Morning India (12/September/19): 1. ART: Tata Motors FY19 (Operational weakness, continued capex dent FCF); 2. Tata Motors (JLR wholesales miss estimates in Aug’19); 3. India Life Insurance (Private playe

MOrning India (12/September/19): 1. ART: Tata Motors FY19 (Operational weakness, continued capex dent FCF); 2. Tata Motors (JLR wholesales miss estimates in Aug’19); 3. India Life Insurance (Private players’ individual WRP growth moderates)

 

Today’s top research Idea

ANNUAL REPORT THREADBARE (ART) | TATA MOTORS FY19: Operational weakness, continued capex dent FCF

• TTMT's FY19 AR analysis highlighted a weak operating performance, with EBITDA declining ~16% YoY to INR256b, despite (a) capitalization of product development expenditure by INR169b (80% of cash spent) and (b) lower pension cost recognized in P&L (INR14b) than cash paid to the pension fund (INR24b).
• Hedging positions have changed materially YoY, with (a) derivatives to hedge USD/CNY sales declining to GBP4.2b/3.4b (FY18: GBP5.9b/5.6b) and (b) derivatives to hedge EUR costs increasing to GBP7.5b (FY18: GBP6.5b).
• FCF post interest declined to -INR230b (FY18: -INR154b), primarily due to the weak operating performance, higher finance cost, higher increase in finance receivable (by INR101b v/s INR64b in FY18) and continued capex.
• High capital intensity dragged RoCE to 2.1% (FY15: 13.5%). Gross adj. debt (excl. financing business) rose to INR876b (FY18: INR822b).

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