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MOSL: TATA MOTORS (Buy)-JLR May-17 volumes below est. at 47,131 units (+2% YoY)-LR volumes up 2%

​Tata Motors: JLR May-17 volumes below est. at 47,131 units (+2% YoY); LR volumes up 2%; Jaguar volumes too up ~2% driven by F-Pace and XF

(TTMT IN, Mkt Cap USD24.7b, CMP INR467, TP INR635, 43% Upside, Buy)

• ​JLR May-17 wholesale volumes grew ~2% YoY (+12% MoM) to 47,131 units, below our estimate of 49,200 units.
  
• Jaguar volumes grew ~2% YoY to 12,652 units (est. of 14,200 units), driven by F-Pace and XF. On the other hand, XE volumes fell 7% YoY, led by a decline in UK volumes due to higher tax from April 2017.
  
• Land Rover (LR) volumes were up 2% YoY at 34,479 units (est. of 35,000 units), led by run-out of Defender and Discovery. However, volumes were up 17% MoM, led by gradual ramp-up in Discovery refresh volumes. Also, pre-buying in March in the UK region due to higher tax from 1 April 2017 led to lower demand in following months.
  
• JLR May-17 retail volumes increased ~1% YoY (+13% MoM) to 45,487 units, as a rise of 28% in Jaguar volumes was offset by a decline in LR volumes by ~7%.
  
• Jaguar retail volumes were driven by F-Pace (to ~5.8k units) and XF (volumes up ~19% YoY). Jaguar XE volumes declined ~7% YoY.
  
• LR’s retail volumes fell ~7% YoY, mainly led by a decline in Discovery (-16%), Discovery Sport (-11%), RR Evoque (-6%) and RR Sport (-5%), partially offset by RR (+10%).
  
• Region-wise, UK/EU sales declined ~11%/6% YoY, offset by North America (+16%) and China (23%), led by high demand for F-Pace, and XF long-wheel base in China. Rest of world sales declined ~15% YoY.