Emkay Global Financial has given Buy recommendation for Tata Motors with a target price of Rs. 530 in its research report issued on Jul 28, 2022

Emkay Global Financial Market’s research report on Tata Motors

For Q1FY23, Tata Motors’ consolidated EBITDA declined by 64% qoq to Rs32bn, 58% below our estimates, due to commodity hedging losses and adverse mix at JLR. Revenue declined by 8% to Rs719bn, 3% below our estimates, because of realization miss at JLR due to lower-than-expected sales of RR/RR Sport. JLR’s order book is strong at ~200,000 units. Models such as Defender and newgeneration RR/RR Sport form ~65% of order bookings, which should lead to product-mix improvement going ahead. Chip supplies are expected to improve in a staggered manner going ahead. We expect a 15% volume CAGR over FY22-24E. We estimate FY22-24E India CV/PV volume CAGRs of 16%/28%, driven by continued upcycle in industry sales and better chip supplies. The focus remains on E-PVs, with medium-term investments of US$2bn toward new products, capacity expansion, localization, and charging infrastructure.


We reduce FY23E consolidated EPS by 9%, factoring weak Q1 results, and FY24E EPS by 7% due to lower volume assumptions of JLR. We reaffirm Buy with an SOTP-based TP of Rs530 (unchanged), based on Sep’24E (June’24E earlier) estimates.

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