MOSL: TATA MOTORS (Buy)-JLR’s December 2017 wholesale volumes in-line at 55k units-Land Rover volumes up 2.8% YoY

​TATA MOTORS: JLR’s December 2017 wholesale volumes in-line at 55k units; Land Rover volumes up 2.8% YoY; Jaguar volumes increase 6% YoY

(TTMT IN, Mkt Cap USD25.0b, CMP INR433, TP INR593, 37% Upside, Buy)

• JLR's wholesale volumes grew 3.8% YoY and 1.5% MoM in December 2017 to 55,066 units (including China JV's 10,269 units). Jaguar volumes grew 6% YoY to 16,826 units against our estimate of 12,000 units due to lower XE sales. Land Rover (LR) volumes increased 2.8% YoY to 38,240 units against our estimate of 54,750 units, led by ramp-up of all-new Discovery and RR Velar.
  
• For 3QFY18, JLR wholesales grew 4.5% YoY to 159,067 units, led by 12.4% YoY growth in Land Rover sales while Jaguar sales fell 12.5% YoY to 42.4k units.
  
• JLR's retail volumes increased marginally by 0.6% YoY and 6.4% MoM to 55,697 units. The 4.1% YoY increase in LR volumes was partially offset by 7.8% YoY decline in Jaguar volumes.
  
• XF volumes grew 6.1% YoY. Jaguar XE volumes declined 35% YoY. F-Pace volumes remained flat YoY. Company started retails of E-Pace, with 454 units.
  
• LR's retail volumes increased by 4.1% YoY, mainly led by 71.1% rise in Discovery volumes, while RR Sport and RR Evoque volumes declined 37.5% and 12.5%, respectively. RR Velar clocked in 6,521 units.
  
• Region-wise, China reported strong volumes at 15,603k units (including China JV's 8,556 units), up 12.6% YoY. The growth in China is reflecting the introduction of the long wheelbase Jaguar XFL as well as strong sales of F-Pace, Discovery Sport, Range Rover Sport and Evoque. While retail sales were down in Europe (-4.6%), US (-9.2%) and UK (-15.8%), other markets witnessed volume growth of 19%.