MOSL: TATA MOTORS (Neutral)-JLR in-line, S/A disappoints-guides for recovery in both businesses in FY20
Tata Motors: JLR in-line, S/A disappoints; guides for recovery in both businesses in FY20
(TTMT IN, Mkt Cap USD8.5b, CMP INR190, TP INR199, 5% Upside, Neutral)
- sales declined 4% YoY to INR864b (in-line) and adj. PAT was at INR21.4b (our estimate: INR12b). For FY19, revenue increased 4%, while EBITDA was down 16%.
- JLR – lower D&A drives EBIT/PAT beat: Net sales fell 6% YoY to GBP7.1b (in-line). EBITDA margin improved 240bp QoQ (-380bp YoY) to 9.8% (in-line). However, a decline in D&A led to an EBIT margin of 3% (above our estimate of 1.8%) and PAT of GBP255m (our estimate: ~GBP104m).
- S/A – higher discounts impact margins: Revenue declined 3.2% YoY to INR185.6b (in-line). EBITDA margin shrank 420bp YoY (-150bp QoQ) to 7.3% (our estimate: 9.2%) due to higher discounts. Higher other income and lower interest restricted the drop in adj. PAT to 68% YoY (INR1.8b v/s our estimate of INR4b).
Tata Motors is an automobile company, engaged in the manufacture and sale of commercial and passenger vehicles primarily in India. Co. provides cars, utility vehicles, trucks, buses, and defense vehicles, as well as develops electric and hybrid vehicles for personal and public transportation. In addition, Co. is engaged in the provision of engineering and automotive applications, as well as machine tools and factory automation applications; construction equipment manufacturing; automotive vehicle components manufacturing, among others. Co. markets its vehicles in Europe, Africa, the Middle East, South East Asia, South Asia, and South America.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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