Hold Tata Motors; target of Rs 200: ICICI Direct

October 10
19:25 2018

ICICI Direct’s research report on Tata Motors

Tata Motors’ owned Jaguar and Land Rover (JLR) came out with volume numbers for September 2018. Total JLR retail sales were at 57,114 units, down 12.3% YoY. For the quarter i.e. Q2FY19, total JLR retail sales were at 1.3 lakh units, down 13.2% YoY. On a YTDCY18 basis, retail sales were down 4% YoY to 448,106 units. Furthermore, media reports suggest that JLR is taking a two-week shutdown at its Solihull (UK) plant to align itself with the global supply & demand scenario. Solihull is one of the major plants for JLR as it accounts for ~48% of its overall volumes. Also, in the recent past it has announced a three-day week plant closure at its Castle Bromwich plant (accounts for ~11% of its volumes) during October-December 2018. Hence, JLR is experiencing a challenging demand scenario in some key markets like China, which was impacted by import tariff while Europe was marred by new Worldwide Harmonised Light Vehicle Test standards (WLTP) norms and lower diesel demand.


We revise our target price to Rs 200/share on SOTP basis and maintain our HOLD rating on the stock. The only saviour for TML is the up trending domestic segment wherein the company is witnessing robust prospects both in the M&HCV space as well as PV segment.

For all recommendations report, click here

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