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MOSL: TATA MOTORS (Buy)-JLR’s wholesale of 53k units (-8% YoY) exceeds estimate; Jaguar volumes up 9% YoY

TATA MOTORS: JLR’s wholesale of 53k units (-8% YoY) exceeds estimate; Jaguar volumes up 9% YoY, but Land Rover volumes decline 19% YoY

(TTMT IN, Mkt Cap USD7.9b, CMP INR184, TP INR335, 82% Upside, Buy)

 

• JLR's wholesale volumes declined 8% YoY (+24% MoM) to 53k units (est. of 45k units; includes China JV volumes of 4.8k units) in Sep-18.
• Jaguar volumes increased 9% YoY to 19k units (est. of 15k), while Land Rover volumes declined 15% YoY to 34k units (est. of 30k).
• JLR's retail volumes fell 12% YoY (down ~4% in 1HFY19) in the month due to a decline of 46% in China retails and ~7% in US retails.
• UK (-1%) and EU (-5%) witnessed substantial volumes pressure after the implementation of WLTP norms from Sep-18.
• Jaguar retail volumes grew 4% YoY, driven by new models like XE & I-Pace; volumes of other models declined substantially. LR volumes declined ~19% YoY, as strong growth in Velar (+26%) was more than diluted by a decline across other models.
• According to JLR, industry retails declined ~20.5% in the UK and ~31% in Germany. This can primarily be ascribed to the timing of new WLTP homologation rules and reduced diesel demand. Industry retails in the US declined ~5.5%.