This document provides an analysis of Tata Motors, India's largest automobile company. It discusses the company's profile, financial performance, and share price movements. The analysis notes that Tata Motors has a leading position in commercial vehicles in India and is among the top three in passenger vehicles. It also summarizes the company's balance sheet figures, fundamental views on operations and outlook, and provides a technical analysis of the stock price.

1. Stock Analysis - Tata Motors
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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
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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
H K Sethna
Secretary
Auditor Deloitte Haskins & Sells
Listing London, Luxembourg, Mumbai, New York, NSE
Website www.tatamotors.com
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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
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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
0 0 0 0 0
Capital
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.
8,466.25 7,212.92 6,259.90 5,443.52 4,894.54
Depreciation
Net Block 13,417.07 11,203.89 7,645.27 5,387.31 3,881.26
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Capital Work in
4,058.56 5,232.15 6,954.04 5,064.96 2,513.32
Progress
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 &
14,090.61 11,699.67 10,836.58 10,781.23 10,318.42
Advances
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
0 0 2.02 6.05 10.09
Expenses
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
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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%.
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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.
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Technical View
Pivot Points (Daily)
SCRIPT R4 R3 R2 R1 P S1 S2 S3 S4
TATA
831.25 794.20 757.15 736.25 720.10 699.20 683.05 646.00 608.95
MOTORS
Pivot Points (Weekly)
SCRIPT R4 R3 R2 R1 P S1 S2 S3 S4
TATA
1094.58 978.53 862.48 788.92 746.43 672.87 630.38 514.33 398.28
MOTORS
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
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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 it in the near term and can make a pullback rally to 38.2% level of 845 making a
ustain
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 If stock forms a double top at around 38.2% level
1270.
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.
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