2 weeks Ago
Emkay Global Financial Services has a Buy call on Tata Motors with a target price of Rs 800. The current market price of Tata Motors is Rs 619.1.
Tata Motors, incorporated in 1945, is a Large Cap company with a market cap of Rs 229039.59 crore, operating in the Auto sector. Tata Motors' key products/revenue segments include Motor Vehicles, Spare Parts & Others, Miscellaneous Goods, Sale of services and Other Operating Revenue for the year ending 31-Mar-2024.
Financials For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 115365.00 crore, up 11.99 % from last quarter Total Income of Rs 103016.
00 crore and up 2.93 % from last year same quarter Total Income of Rs 112075.94 crore.
The company has reported net profit after tax of Rs 5616.00 crore in the latest quarter. The company's top management includes Mr.
N Chandrasekaran, Mrs.Usha Sangwan, Mr.Om Prakash Bhatt, Mr.
Bharat Puri, Mr.N Chandrasekaran, Mr.Girish Wagh, Ms.
Hanne Sorensen, Ms.Vedika Bhandarkar, Mr.Kosaraju V Chowdary, Mr.
Al-Noor Ramji, Mrs.Usha Sangwan, Mr.Om Prakash Bhatt, Mr.
Al-Noor Ramji, Mr.Kosaraju V Chowdary, Ms.Vedika Bhandarkar, Mr.
Girish Wagh, Ms.Hanne Sorensen, Ms.Vedika Bhandarkar, Mr.
Kosaraju V Chowdary, Mr.Al-Noor Ramji, Mrs.Usha Sangwan, Mr.
Om Prakash Bhatt, Mr.Bharat Puri, Mr.N Chandrasekaran, Mr.
Girish Wagh, Ms.Hanne Sorensen, Mr.Bharat Puri.
Company has BSR & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 368 crore shares outstanding.
Investment RationaleTata Motors' share price has corrected ~27% in the last 3 months. This includes the ~17% drop since last week of March when the US announced 25% tariffs on imports of Autos/Auto parts, exacerbating investor concerns on the prevailing weakness in China (North America is JLR's largest market ? 32% of FY25 wholesales). Amid the noise around macros, Emkay highlights that JLR's implied FY27E EV/S at ~0.
7x is near the historical lows of ~0.5x (seen in the FY16-21 phase of rising debt levels and Covid), even as the company has witnessed a strong, operational and financial turnaround (culminating in meeting the stated net-cash BS objective in FY25). Even with bear case assumptions of a 25% drop in US sales next year, the bigger Tata Motors financial health improvement story remains largely intact net auto debt-to-equity at ~0.
24x in FY27E (bear case) vs ~0.1x in FY25E; ~1.1x in FY22.
We trim FY25E/ 26E/ 27E EPS by ~5-6% to factor in some of the potential weakness (5% drop in US sales, flat non-US sales). We retain BUY while cutting our TP (SoTP-based) by ~16% to Rs 800. Promoter/FII Holdings Promoters held 42.
58 per cent stake in the company as of 31-Dec-2024, while FIIs owned 18.66 per cent, DIIs 16.48 per cent.
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