Documente Academic
Documente Profesional
Documente Cultură
29 AUG 2016
Tata Motors
BUY
INDUSTRY
AUTOS
Rs 504
Target Price
Rs 533
Promoters
33.01
16.84
FIIs
24.97
25.18
Nifty
8,573
Sensex
27,782
TTMT IN
3,396
1,622/24,148
4,250
Rs 523 / 266
3M
6M
12M
Absolute (%)
26.2
66.9
50.3
Relative (%)
20.8
46.9
42.3
Source : BSE
Abhishek Jain
abhishekkumar.jain@hdfcsec.com
+91-22-6171-7320
Sneha Prashant
sneha.prashant@hdfcsec.com
+91-22-6171-7336
1QFY17
659
85
18
5.2
1QFY16
604
117
46
13.6
YoY (%)
9.1
(27.6)
(61.6)
(61.6)
FY15
2,628
395
145
45.0
11.2
5.4
23.8
FY16
2,756
374
138
40.6
12.4
5.8
20.1
FY17E
3,001
436
170
49.9
10.1
5.1
19.1
FY18E
3,331
487
201
59.2
8.5
4.4
18.9
Source: Company, HDFC sec Inst Research. * EV/EBITDA on adjusted basis please refer page to page 11 for details
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
Particulars
Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Depreciation
EBIT
Other Income
Interest Cost
Product Development Cost
PBT
Tax
RPAT
Share of profits in associates/JVs
RPAT before EO Items
EO Items (Adj For Tax)
APAT
Adj EPS
1QFY17
6,58,949
3,90,908
74,664
1,08,537
84,840
45,508
39,332
1,736
11,694
8,711
20,662
7,200
13,462
4,290
17,752
(4,905)
22,658
5.2
1QFY16
6,04,009
3,56,340
68,856
61,691
1,17,123
37,416
79,707
2,241
11,496
7,055
63,398
16,485
46,912
(708)
46,204
93
46,111
13.6
YoY (%)
9.1
9.7
8.4
75.9
(27.6)
21.6
(50.7)
(22.5)
1.7
23.5
(67.4)
(56.3)
(71.3)
(705.8)
(61.6)
(5,352.0)
(50.9)
(61.6)
1QFY17
59.3
11.3
16.5
12.9
34.8
3.4
1QFY16
59.0
11.4
10.2
19.4
26.0
7.6
YoY (bps)
33
(7)
626
(652)
884
(420)
Page | 2
(Rsmn)
CV (Domestic, in units)
PV (Domestic, in units)
Exports (in units)
Total Volumes (in units)
Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Depreciation
EBIT
Other Income
Interest Cost
Product Development Cost
PBT
Tax
RPAT
EO Items (Adj For Tax)
APAT
Adj EPS
1QFY17
78,328
31,966
13,816
1,24,110
1,03,196
68,865
8,983
18,443
6,905
7,122
(218)
6,246
3,401
1,162
1,465
121
1,344
1,087
258
0.4
1QFY16
71,414
31,586
13,510
1,16,510
93,242
63,632
8,083
15,877
5,651
5,803
(152)
9,072
4,350
944
3,626
422
3,204
306
2,898
0.9
YoY (%)
9.7
1.2
2.3
6.5
10.7
8.2
11.1
16.2
22.2
22.7
43.4
(31.2)
(21.8)
23.0
(59.6)
(71.3)
(58.1)
255.4
(91.1)
(55.1)
1QFY17
66.7
8.7
17.9
6.7
8.3
1.3
1QFY16
68.2
8.7
17.0
6.1
11.6
3.4
YoY (bps)
(151)
4
151.4
63
(336)
(213)
4QFY16
99,487
30,144
17,135
1,46,766
1,25,698
84,891
7,445
23,144
10,217
6,140
4,077
1,297
3,438
1,254
682
(953)
1,635
(3,015)
4,650
0.5
QoQ (%)
(21.3)
6.0
(19.4)
(15.4)
(17.9)
(18.9)
20.6
(20.3)
(32.4)
16.0
(105.3)
381.6
(1.1)
(7.3)
114.8
(112.7)
(17.8)
(136.0)
(94.5)
(17.8)
4QFY16
67.5
5.9
18.4
8.1
(139.8)
1.3
QoQ (bps)
(80)
278
(54)
(144)
14,803
0
Page | 3
1QFY17
132.7
121.0
5,461
3,227
605
1,279
(322)
672
12
388
(82)
45
399
51
95
304
355
1QFY16
114.9
110.6
5,002
2,906
552
1,038
(315)
821
10
318
(149)
(4)
638
146
492
492
YoY (%)
15.5
9.3
9.2
11.0
9.6
23.2
2.2
(18.1)
20.0
22.0
(45.0)
(1,225.0)
(37.5)
(34.9)
(38.2)
(27.8)
4QFY16
158.8
149.9
6,594
3,828
648
1,347
(298)
1,069
13
378
42
49
685
(108)
105
580
472
QoQ (%)
(16.4)
(19.3)
(17.2)
(15.7)
(6.6)
(5.0)
8.1
(37.1)
(7.7)
2.6
(295.2)
(8.2)
(41.8)
(147.2)
(9.5)
(47.6)
(24.8)
1QFY17
59.1
11.1
23.4
12.3
5.6
23.8
1QFY16
58.1
11.0
20.8
16.4
9.8
22.9
YoY (bps)
99.5
4.3
266.9
(410.8)
(426.9)
92.6
4QFY16
58.1
9.8
20.4
16.2
8.8
15.3
QoQ (bps)
103.9
125.1
299.3
(390.6)
(322.9)
848.1
Page | 4
in Mn
Revenue
% YoY
Wholesales Volumes Incl CJLR (in '000)
% growth
Net ASP
% YoY
Expenditure
Material Cost
% Of Sales
Employee Cost
% Of Sales
Other Expenses
% Of Sales
Add back R&D Cost
% Of Sales
R&D Cost Expensed
Total
% Of Sales
EBITDA
EBITDA margin %
Other Income
Depreciation And Amortisation
Interest Expense
Forex gain/(loss)
Share Of Profit/(Loss) From Joint Venture
% Of Sales
PBT
% Of Sales
Tax
Tax rate %
APAT
% Of Sales
RPAT
% Of Sales
FY14
19,386
22.8
430
15.5
45,098
6.3
FY15
21,866
12.8
471
9.5
46,875
3.9
FY16
22,208
1.6
544
15.6
43,602
(7.0)
FY17E
24,666
11.1
628
15.3
43,851
0.6
FY18E
27,138
10.0
695
10.8
44,976
2.6
11,904
61.4
1,654
8.5
3,465
17.9
(1,266)
(6.5)
236
15,993
82.5
3,393.0
17.5
875
147
137
(7)
(0.0)
2,501
12.9
622
24.9
1,879
9.7
1,879
9.7
13,185
60.3
1,977
9.0
3,730
17.1
(1,411)
(6.5)
253
17,734
81.1
4,132.0
18.9
1,051
87
(373)
(7)
(0.0)
2,614
12.0
576
22.0
2,038
9.3
2,038
9.3
13,146
59.2
2,321
10.5
4,670
21.0
(1,560)
(7.0)
318
18,895
85.1
3,313.0
14.9
1,403
54
(27)
66
0.3
1,895
8.5
247
13.0
1,649
7.4
1,326
6.0
14,652
59.4
2,541
10.3
5,039
20.4
(1,750)
(7.1)
350
20,831
84.5
3,834.9
15.5
1,655
45
111
0.5
2,246
9.1
515
22.9
1,731
7.0
1,731
7.0
16,174
59.6
2,768
10.2
5,427
20.0
(1,820)
(6.7)
364
22,914
84.4
4,224.8
15.6
1,834
45
170
0.6
2,515
9.3
567
22.5
1,948
7.2
1,948
7.2
Page | 5
Rs in Mn
Vehicle Sales (in units)
CV (Domestic)
PV (Domestic)
Exports
Total
% YoY
Net Sales
% YoY
Other Operating Income
Total Income From Operations
Expenditure
RM Cost
% Of Sales
Employee Cost
% Of Sales
Other
% Of Sales
Total Expenses
% Of Sales
EBITDA
EBITDA Margin %
Other Income
Product Development Expenses
Depreciation
Interest
PBT (Pre-exceptional Items)
PBT (Pre-exceptional And JLR Dividend)
FY14
FY15
FY16
FY17E
FY18E
381,412
135,287
49,892
566,591
(30.0)
339,070
(23.6)
3,811
342,881
329,943
133,304
49,917
513,164
(9.4)
358,905
5.8
4,042
362,948
327,730
125,945
57,991
511,666
(0.3)
419,480
16.9
4,218
423,698
381,300
148,100
65,621
595,021
16.3
503,828
20.1
4,640
508,468
429,514
173,100
71,742
674,356
13.3
585,839
16.3
5,104
590,943
259,144
76.4
28,777
8.5
59,784
17.6
347,705
93.0
(4,824)
(1.4)
18,669
4,287
20,703
13,532
(24,677)
(38,230)
270,417
75.3
30,915
8.6
66,518
18.5
367,849
94.0
(4,901)
(1.4)
18,815
4,375
26,032
16,117
(32,610)
(47,460)
295,953
70.6
30,267
7.2
70,076
16.7
396,296
85.7
27,402
6.5
14,765
4,246
24,538
14,811
(1,427)
(15,745)
356,944
70.8
34,564
6.9
78,654
15.6
470,162
84.5
38,306
7.6
17,188
4,500
27,492
13,196
10,306
(4,094)
416,615
71.1
38,200
6.5
85,775
14.6
540,590
83.6
50,353
8.6
17,645
5,000
29,960
12,889
20,149
5,749
Page | 6
SOTP Valuation
Standalone
JLR
China JV
Other Subsidiaries
Less: Net Automotive Debt
Target Price
Valuation methodology
EV / EBIDTA on Mar 18E
EV / EBIDTA on Mar 18E
EV / EBIDTA on Mar 18E
P/E, PBV on Mar 18E
Multiple
8.0
4.0
5.0
Per share
119
371
43
28
28
533
Change In Estimates
In Rs bn
Net Sales
EBITDA
Adj PAT
Adj EPS
New
FY17E
3,001
436
170
49.9
FY18E
3,331
487
201
59.2
Old
FY17E
3,001
436
170
49.9
FY18E
3,331
487
201
59.2
% chg
FY17E
-
FY18E
-
Page | 7
100
40.0%
15.0%
10.0%
40
20
-
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
0.0%
1QFY15
19
17
21
18
16
21
21
29
18
60
5.0%
0.0%
20
21
16
21
27
30
28
20
15
16
16
20
15
17
14
14
20
13
23
25
19
25
27
11
27
26
11
21
21
19
24
21
22
1QFY17
20.0%
22
4QFY16
25.0%
21
80
30.0%
60.0%
ROW
3QFY16
80.0%
Europe
2QFY16
35.0%
China
1QFY16
40.0%
NA
4QFY15
100.0%
20.0%
UK
2QFY15
Land Rover
1QFY15
Jaguar
3QFY15
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
35.0%
3QFY15
2QFY15
10
40.0%
5.0%
4.5%
4.0%
1QFY17
20
5.5%
4QFY16
45.0%
3QFY16
30
6.0%
2QFY16
50.0%
1QFY16
40
6.5%
4QFY15
55.0%
7.0%
3QFY15
50
M/S - RHS
50
45
40
35
30
25
20
15
10
5
0
2QFY15
60.0%
1QFY15
M/S - RHS
1QFY15
Page | 8
Peer Valuations
Ashok Leyland
Atul Auto
Bajaj Auto
Eicher Motors
Hero Motocorp
M&M
Maruti Suzuki
SML Isuzu
Tata Motors
Mcap
(Rs bn)
CMP
(Rs/sh)
Rating
TP
250
10
826
604
663
843
1,485
19
1,712
88
445
2,853
22,280
3,319
1,427
4,916
1,344
504
NEU
BUY
NEU
BUY
BUY
NEU
BUY
NEU
BUY
82
643
2,685
24,736
3,325
1,410
5,318
1,086
533
FY16
22.5
20.6
22.6
47.3
21.2
25.7
31.9
38.1
12.4
P/E (x)
FY17E FY18E
20.5
17.2
17.1
13.8
20.5
18.2
36.6
26.9
19.3
17.5
20.4
18.0
24.5
20.0
25.5
19.8
10.1
8.5
EV/EBITDA (x)
FY16 FY17E FY18E
12.1
10.9
9.6
12.6
10.0
8.0
15.4
13.6
11.8
22.0
19.4
14.1
14.1
12.5
11.2
15.3
12.5
10.8
16.3
14.7
12.0
23.2
16.2
12.3
5.8
5.1
4.4
FY16
20.9
34.4
31.8
39.5
43.1
15.6
18.3
15.9
20.1
RoE (%)
FY17E FY18E
21.0
22.4
32.6
32.3
30.8
30.8
40.9
40.5
39.6
37.6
17.6
17.7
20.7
21.9
20.7
22.8
19.1
18.9
Source: Company, HDFC sec Inst Research*Tata Motors EV/EBITDA based on EV less net auto debt and adjusted EBITDA (normalised R&D spends in line with luxury car makers)
Page | 9
FY14
2,328
23.3
1,436
216
26
303
348
15.0
41.6
111
238
8
47
199
48
(1)
(1)
150
42.7
46.5
41.4
(10)
140
FY16
2,756
4.9
1,624
292
35
431
374
13.6
(5.4)
170
204
10
46
167
29
(1)
0
138
(4.8)
40.6
(9.8)
(28)
110
FY17E
3,001
8.9
1,785
309
37
433
436
14.5
16.6
192
245
9
39
214
54
(1)
10
170
23.0
49.9
23.0
170
FY18E
3,331
11.0
1,992
338
39
474
487
14.6
11.7
211
276
9
39
246
60
(1)
16
201
18.5
59.2
18.5
201
(Rs bn)
SOURCES OF FUNDS
Share Capital - Equity
Reserves
Total Shareholders Funds
Minority Interest
Long-term Debt
Short-term Debt
Total Debt
Net Deferred Taxes
Long-term Provisions & Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Goodwill
Investments
LT Loans & Advances
Total Non-current Assets
Inventories
Debtors
Cash & Equivalents
Total Current Assets
Creditors
Other Current Liabilities & Provns
Total Current Liabilities
Net Current Assets
TOTAL APPLICATION OF FUNDS
FY14
FY15
FY16
FY17E
FY18E
6
650
656
4
606
606
(8)
202
1,461
6
556
563
4
736
736
(14)
212
1,501
7
801
808
9
705
705
4
205
1,731
7
961
968
10
735
735
10
220
1,942
7
1,150
1,157
10
752
752
16
228
2,162
641
336
50
11
367
1,405
273
106
393
771
716
838
289
47
12
293
1,479
293
126
462
881
858
1,003
285
48
13
331
1,681
334
130
521
985
935
1,183
284
48
13
365
1,893
392
153
459
1,005
956
1,341
288
48
13
395
2,086
428
167
488
1,083
1,007
716
55
1,461
858
22
1,501
935
50
1,731
956
49
1,942
1,007
77
2,162
Page | 10
FY15
222
(5)
49
134
187
(76)
510
(281)
230
1
(7)
(286)
130
(49)
311
(233)
(152)
72
(3)
462
FY16
167
(28)
46
170
(14)
(29)
313
(333)
(20)
0
22
(311)
(31)
(46)
(98)
136
(1)
57
59
521
FY17E
214
39
192
(79)
(54)
312
(370)
(58)
16
(354)
30
(39)
(68)
(10)
(19)
(62)
459
FY18E
246
39
211
(21)
(60)
415
(374)
41
22
(352)
17
(39)
19
(12)
(34)
29
488
PROFITABILITY (%)
GPM
EBITDA Margin
APAT Margin
RoE
RoIC (or Core RoCE)
RoCE
EFFICIENCY
Tax Rate (%)
Fixed Asset Turnover (x)
Inventory (days)
Debtors (days)
Payables (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E (x)
Interest Coverage (x)
PER SHARE DATA (Rs)
EPS
CEPS
Dividend
Book Value
VALUATION
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Revenues (x)
OCF/EV (%)
FCF/EV (%)
FCFE/Mkt Cap (%)
Dividend Yield (%)
FY14
FY15
FY16
FY17E
FY18E
38.3
15.0
6.4
29.0
20.7
16.8
39.1
15.0
5.5
23.8
17.0
13.6
41.1
13.6
5.0
20.1
14.9
12.4
40.5
14.5
5.6
19.1
13.6
12.4
40.2
14.6
6.0
18.9
13.4
12.8
24.0
1.8
42.8
16.6
112.2
(52.9)
1.7
0.1
5.0
34.4
1.7
40.7
17.5
119.2
(61.1)
1.9
0.2
5.4
17.2
1.4
44.2
17.2
123.8
(62.4)
1.9
0.0
4.4
25.3
1.3
47.7
18.7
116.3
(49.9)
1.7
0.1
6.2
24.6
1.3
47.0
18.3
110.3
(45.1)
1.5
0.1
7.1
46.5
72.7
2.0
118.0
45.0
78.8
203.8
37.5
71.8
2.0
174.8
46.9
94.6
2.5
214.2
56.0
108.9
3.0
258.2
10.8
2.5
5.8
0.7
18.9
(5.2)
(3.9)
0.4
11.2
2.9
5.4
0.7
29.5
13.3
19.2
-
12.4
2.1
5.8
0.6
18.0
(1.2)
(5.7)
0.0
10.1
1.8
5.1
0.6
17.3
(3.2)
(4.0)
0.5
8.5
1.5
4.4
0.5
23.4
2.3
1.1
0.6
Source: Company, HDFC sec Inst Research * EV/EBITDA based on EV less net auto debt and
adjusted EBITDA (normalised R&D spends in line with luxury car makers).
Page | 11
RECOMMENDATION HISTORY
Tata Motors
700
Date
8-Aug-15
23-Sep-15
7-Nov-15
12-Feb-16
12-May-16
31-May-16
29-Aug-16
TP
600
500
400
CMP
393
316
396
276
380
421
504
Reco
BUY
BUY
BUY
BUY
BUY
BUY
BUY
Target
515
445
435
434
479
524
533
300
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
200
Rating Definitions
BUY: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL: Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
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Any holding in stock No
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