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MOSL: TATA MOTORS (Neutral)-JLR’s Feb’19 wholesales in line at 49.7k (est. 48.3k)-Jaguar volumes decline 8% YoY

Tata Motors: JLR’s Feb’19 wholesales in line at 49.7k (est. 48.3k); Jaguar volumes decline 8% YoY and Land Rover volumes drop 14.5% YoY

(TTMT IN, Mkt Cap USD8.1b, CMP INR182, TP INR166, 9% Downside, Neutral)

 

• JLR’s wholesale volumes declined 13% YoY (+19% MoM) to 49.7k units (v/s est. of 48.3k units), which includes 2.5k units (-51% YoY) from its China JV.
• Jaguar volumes declined 8% YoY to 14.9k units (v/s est. of 13.8k units), while Land Rover volumes declined 14.5% YoY to 34.8k units (v/s est. 34.5k units).
• JLR’s retail volumes in Feb’19 declined 4% YoY, impacted by ~48% decline in China, while the US (+25%) and the UK (+11%) grew well.
• Jaguar’s retail volume grew 6% YoY led by growth in models like E-Pace (+59%), XE (+12%) and I-Pace, which was offset by substantial decline in other models.
• LR’s retail volume declined 8% YoY, as growth in Range Rover (+8%) and Range Rover Sport (+31%) was more than diluted by decline across other models.
• Felix Brautigam, Jaguar Land Rover’s Chief Commercial Officer said, “In the face of ongoing macro-economic challenges being felt by the automotive industry, particularly in China, our strong sales growth in North America, the UK and Europe reflect continued demand for our exciting product line-up and two strong brands. Encouragingly, all three regions posted sales growth against an industry decline. In North America, high customer demand even resulted in the region’s best-ever February sales numbers.”
• The stock trades at 10.6x/8.6x FY20/FY21 consolidated EPS. Maintain Neutral with a target price of INR166 (Mar’21 SOTP-based).