MOSL: TATA MOTORS (Buy) - JLR’s Aug-17 volumes miss estimate-LR’s volume up 14% YoY, led by Discovery and RR Velar

​Tata Motors | JLR’s Aug-17 volumes miss estimate; LR’s volume up 14% YoY, led by Discovery and RR Velar; Jaguar volume down 16%

(TTMT IN, Mkt Cap USD25.0b, CMP INR387, TP INR542, 40% Upside, Buy)

• ​JLR’s Aug-17 wholesale volumes grew 4.8% YoY (-13.6% MoM) to 44,420 units (including China JV at 7,026 units, +87% YoY), below our estimate of 49,456 units.
  
• Jaguar volumes declined 15.8% YoY to 10,978 units (est. of 13,364), led by lower sales of XE.
  
• Land Rover (LR) volumes rose 14% YoY to 33,442 units (est. of 36,092), led by the ramp-up of all-new Discovery in North America and China, and the introduction of RR Velar in the UK and EU.
  
• JLR’s Aug-17 retail volumes rose 4.3% YoY (-16.4% MoM) to 38,519 units, led by an increase in LR and Jaguar volumes by 5.8% and 0.8%, respectively.
  
• Jaguar’s retail volumes were driven by F-Pace (~4.9k units) and XF (+41.2% YoY) volumes. Jaguar’s XE volumes declined 29.4% YoY.
  
• LR’s retail volumes increased 5.8% YoY, mainly led by a continued rise in Discovery Sport (+11.3%) and RR (+2.3%) volumes, while RR Sport and RR Evoque volumes declined 7.6% and 1.8%, respectively.
  
• Region-wise, China reported strong volumes at 12.09k units (+30% YoY, incl. China JV volume at 7,026 units), led by the introduction of the long wheel base Jaguar XFL, and strong sales of F-Pace, Discovery Sport, Range Rover Sport and Evoque. Retail sales were down in the UK (-11.7%) and EU (9.4%); Rest of world sales too declined 5.4% YoY.