Stock Analysis - Tata Motors
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
CONTENTS Introduction Company profile Returns to investors Financials
Fundamental View Balance Sheet Fundamental View Key Extracts
Technical View PIVOT Points (Daily & Weekly) Moving Averages Fibonacci Retracement Chart Analysis
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
Introduction Tata Motors Limited is India's largest automobile company. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The Company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer. Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 5.9 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The Company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). The Company's 24,000 employees are guided by the vision to be "best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics."
Company profile COMPANY PROFILE Industry
Auto - LCVs/HCVs
Business Group
Tata Group
Incorporation Year
1945
Registered Office
Bombay House, 24 Homi Mody Street Fort, Mumbai, Maharashtra-400001
Chairman
Ratan Tata
Managing Director
Carl Peter Forster
Company Secretary
H K Sethna
Auditor
Deloitte Haskins & Sells
Listing
London, Luxembourg, Mumbai, New York, NSE
Website
www.tatamotors.com
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
SHARE HOLDING PATTERN (in %) PROMOTER'S HOLDING
34.84
DII
14.02
FII's
22.98
Others
28.16
Total
100.00
Returns to investors RIGHT ANNOUNCEMENTS YEAR
RATIO
2008
1:6
2001
1:4
1991
1:5
BONUS ANNOUNCEMENTS YEAR
RATIO
1995
3:5
1982
2:5
1979
2:5
1977
1:5
DIVIDEND DETAILS YEAR
DIVIDEND (%)
July 2011
20.00
Aug 2010
15.00
Aug 2009
6.00
June 2008
15.00
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
Financials Balance Sheet of Tata Motors (Rs. Cr.) Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
Sources Of Funds Total Share Capital
634.65
570.6
514.05
385.54
385.41
Equity Share Capital
634.65
570.6
514.05
385.54
385.41
Share app. money
3.06
0
0
0
0
Preference Share Capital
0
0
0
0
0
Reserves
19,375.59
14,394.87
11,855.15
7,428.45
6,458.39
Revaluation Reserves
0
0
25.07
25.51
25.95
Networth
20,013.30
14,965.47
12,394.27
7,839.50
6,869.75
Secured Loans
7,766.05
7,742.60
5,251.65
2,461.99
2,022.04
Unsecured Loans
8,132.70
8,883.31
7,913.91
3,818.53
1,987.10
Total Debt
15,898.75
16,625.91
13,165.56
6,280.52
4,009.14
Total Liabilities
35,912.05
31,591.38
25,559.83
14,120.02
10,878.89
Application Of Funds Gross Block
21,883.32
18,416.81
13,905.17
10,830.83
8,775.80
Less: Accum. Depreciation
8,466.25
7,212.92
6,259.90
5,443.52
4,894.54
Net Block
13,417.07
11,203.89
7,645.27
5,387.31
3,881.26
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950 Capital Work in Progress
4,058.56
5,232.15
6,954.04
5,064.96
2,513.32
Investments
22,624.21
22,336.90
12,968.13
4,910.27
2,477.00
Inventories
3,891.39
2,935.59
2,229.81
2,421.83
2,500.95
Sundry Debtors
2,602.88
2,391.92
1,555.20
1,130.73
782.18
Cash and Bank Balance
2,428.92
1,753.26
638.17
750.14
535.78
Total Current Assets
8,923.19
7,080.77
4,423.18
4,302.70
3,818.91
Loans and Advances
5,167.42
4,618.90
5,909.75
4,831.36
6,208.53
Fixed Deposits
0
0
503.65
1,647.17
290.98
Total CA, Loans & Advances
14,090.61
11,699.67
10,836.58
10,781.23
10,318.42
Deffered Credit
0
0
0
0
0
Current Liabilities
15,055.69
16,117.80
10,968.95
10,040.37
6,956.88
Provisions
3,222.71
2,763.43
1,877.26
1,989.43
1,364.32
Total CL & Provisions
18,278.40
18,881.23
12,846.21
12,029.80
8,321.20
Net Current Assets
-4,187.79
-7,181.56
-2,009.63
-1,248.57
1,997.22
Miscellaneous Expenses
0
0
2.02
6.05
10.09
Total Assets
35,912.05
31,591.38
25,559.83
14,120.02
10,878.89
Contingent Liabilities
4,798.83
3,447.50
5,433.07
5,590.83
5,196.07
Book Value (Rs)
315.31
262.3
240.64
202.7
177.59
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
Fundamental View EBIDTA/APAT at Rs 42.3bn/21.7bn were 7%/4% above estimate driven by JLR. JLR
reports
FCF
of
GBP
117mn
despite
capex/R&D
of
GBP
400mn.
Net D/E was 0.18x (Mar11 - 0.24x) Net sales at GBP 2.7bn were marginally higher than estimate of GBP 2.6bn led by improved realizations. Average selling price at GBP 43,682 increased ~14% Y/Y, 5.6% Q/Q driven by
favorable geography mix (higher China sales) and lower
discount Volume outlook remains strong for JLR with launch of Evoque, new XF (2.2 ltr diesel) and also XF 2012 Lower FY12/FY13 EPS estimates by 11%/9% to Rs 138/155 to factor in deteriorating macro environment (lower valuation multiple). Product mix continues to remain in favor of LR due to inventory clearance of Jaguar in US/UK in the run to the introduction of 2012 XF. Also company will be introducing a smaller XF (2.2 tlr diesel) in 2H. JLR continued to improve on its balance sheet and cash flow generation. Net debt reduced sequentially from GBP 354mn to GBP 295mn in 1QFY12. Also net DE registered improvement. More importantly, this was after a capex/R&D spends of GBP 400mn Consolidated EBITA at Rs 42.3bn was 7% above estimate of Rs 40bn driven by stronger top line and better operating performance. JLR reported EBIDTA of GBP 408mn (est. GBP 400mn) before amortization of product development expenses. However, EBIDTA for standalone business at Rs 9.7bn was lower than estimate impacted by higher other expenses at 18.9%.
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
Key Extracts JLR is witnessing slight moderation in demand from US and UK geographies. China and Russia continue to remain strong Jaguar performance to improve driven by low base effect, inventory correction and strong focus on ramping up dealer network in US and China. Also, expectation of new XF launch is leading to softening of demand for the current model in US and UK. Expect new XF launch to drive volume growth. Landrover Evoque is scheduled for launch on Sep 2011. Orders as of June 2011 end stand at 18,000 units. JLR margins to remain subdued due to Evoque product launch related costs, unfavorable product mix with Evoque ramp up, higher R&D/prod. dev expenses and currency movement. Domestic business continues to face margin pressures on subdued demand and high commodity prices. Company has taken a price increase of ~1.5% for CVs in July. Freight rates have remained flat for this quarter despite rise in diesel prices. Company hedges forex exposure on a 12 month rolling basis. ~60-70% of USD/GBP exposure has been hedged for next quarter and lower exposure of subsequent quarters. Current capex stands at Rs 37bn for standalone business and GBP 370mn for JLR. Consolidated
Net
debt
(excl.
vehicle
finance)
stands
at
Rs
145bn
(Standalone of Rs 137bn). At CMP of Rs 712, the stock trades at PER of 6.1x/5.5x and EV/EBIDTA of 4.2x/3.7x our FY12 and FY13 es. respectively. We are enthused by FCF generation at JLR despite a GBP 400mn capex. Similarly, there is a sequential reduction in net debt.
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
Technical View Pivot Points (Daily) SCRIPT TATA MOTORS
R4 831.25
R3
R2
R1
P
S1
S2
794.20 757.15 736.25 720.10 699.20 683.05
S3
S4
646.00
608.95
S3
S4
514.33
398.28
Pivot Points (Weekly) SCRIPT TATA MOTORS
R4
R3
R2
R1
P
S1
S2
1094.58 978.53 862.48 788.92 746.43 672.87 630.38
Moving Averages Moving Averages
20 Day
50 Day
100 Day
200 Day
Daily
892.58
951.27
1054.29
1130.71
Weekly
1051.75
1127.55
939.20
683.99
Fibonacci Retracement Time Frame
0.0%
23.6%
38.2%
50.0%
61.8%
76.4%
100%
Weekly
1382
1083.47
898.79
749.52
600.25
415.57
124.80
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
Chart Analysis
c a b
In the weekly chart above, Tata Motors is following Elliot wave pattern and lower tops and lower bottoms since Dec 2010. Presently, near its 200 SMA of Rs. 684, it can sustain ustain it in the near term and can make a pullback rally to 38.2% level of 845 making a lower top. From there, it can complete its intermediate correction phase and complete 4th wave making lower top,, taking resistance of its upward downward resistance trendline drawn from peaks of 1270 1270. If stock forms a double top at around 38.2% level then can slide back to its 200 SMA at around Rs. 680 and if in the near term it breaks this level; then can form its 5th impulsive wave to the level of 420 in coming H2FY12. In Conclusion, Tata motors from its 200 SMA of rs. 680-690 will see a pullback rally to 38.2% retracement level of Rs. 850 in the near term and from there would possibly slide downward to complete its 5th impulsive wave to Rs. 420 in the longer term.
www.capitalheight.com
info@capitalheight.com Phone- (0731)4295950
.
Disclaimer
The information and views in this report, our website & all the service we provide are believed to be reliable, but we do not accept any responsibility (or liability) for errors of fact or opinion. Users have the right to choose the product/s that suits them the most. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. This material is for personal information and based upon it & takes no responsibility The information given herein should be treated as only factor, while making investment decision. The report does not provide individually tailor-made investment advice. Money CapitalHeight Research Pvt. Ltd. recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. Money CapitaHeight Research Pvt. Ltd. shall not be responsible for any transaction conducted based on the information given in this report, which is in violation of rules and regulations of NSE and BSE. The share price projections shown are not necessarily indicative of future price performance. The information herein, together with all estimates and forecasts, can change without notice. Analyst or any person related to Money CapitalHeight Research Pvt. Ltd. might be holding positions in the stocks recommended. It is understood that anyone who is browsing through the site has done so at his free will and does not read any views expressed as a recommendation for which either the site or its owners or anyone can be held responsible for . Any surfing and reading of the information is the acceptance of this disclaimer. All Rights Reserved. Investment in Commodity and equity market has its own risks. We, however, do not vouch for the accuracy or the completeness thereof. we are not responsible for any loss incurred whatsoever for any financial profits or loss which may arise from the recommendations above. Money CapitalHeight Research Pvt. Ltd. does not purport to be an invitation or an offer to buy or sell any financial instrument. Our Clients (Paid Or Unpaid), Any third party or anyone else have no rights to forward or share our calls or SMS or Report or Any Information Provided by us to/with anyone which is received directly or indirectly by them. If found so then Serious Legal Actions can be taken.
www.capitalheight.com