RESULTS REVIEW 4QFY16

31 MAY 2016

Tata Motors
BUY
INDUSTRY

AUTOS

CMP (as on 30 May 2016)

Rs 421

Target Price

Rs 524

Nifty

8,179

Sensex

26,726

KEY STOCK DATA

Bloomberg

TTMT IN

No. of Shares (mn)

3,396

MCap (Rs bn) / ($mn)

1,430/21,279

6m avg traded value (Rs mn)

3,487

STOCK PERFORMANCE (%)

52 Week high / low

Rs 483 / 266
3M

6M

12M

Absolute (%)

40.6

(0.5)

(12.5)

Relative (%)

24.4

(2.7)

(8.6)

SHAREHOLDING PATTERN (%)

JLR at full throttle; India steady

JLRs 4QFY16 topline at GBP 6,594mn (+13% YoY)
beat expectations as net ASP rose 5% QoQ despite a
weaker regional/model mix. Adjusted for one-offs,
EBITDA margin at 16.2% (+180bps QoQ) positively
surprised with gross margin expansion (+240bps QoQ
to 41.9%). The China JVs profit per vehicle more
than doubled QoQ. APAT at GBP 580mn (+92% YoY)
beat estimates. The India business, too, stood its
ground with EBITDA of Rs 10.2bn (+241% YoY).

Highlights of the quarter

Strong volume growth: JLRs management is

upbeat on FY17 volume growth with its strong
product pipeline, healthy macro environment in
the UK, Europe and the US, and recovery in China
vehicle demand. In India, management expects
improving economic growth and market share
gains to drive CV demand.

In our recent note (link), we highlighted JLRs modest

market share (~4/10% for Jaguar/LR) and strong
model pipeline. A strong 4Q operational beat raises
hopes of EBITDA margins trending in the upper range
(14-16%), aided by oplev and platform consolidation
benefits. The India business is recovering with strong
CV growth <14% CAGR over FY16-18E) and improved
traction in PVs <17% CAGR>.

Capex guidance: JLRs capex in FY16 was GBP

3.1bn. The management has guided for capex of
GBP 3.75bn (ex-China JV). The China JV is likely to
fund capex through internal accruals. The India
business capex is pegged at ~Rs 35-40bn.

Near-term outlook: JLRs volumes should ramp-up

sharply with the launch of F-Pace in Europe/UK
and XE in the US. The India business should also
see robust volume growth in CVs and PVs. Expect
stock trajectory to remain strong.

Promoters

33.01

FIs & Local MFs

19.22

FIIs

22.08

Margin traction and visibility at JLR drive up our

FY17/18E earnings by ~6%. Our revised SOTP-based
TP is Rs 524 (up 9% from Rs 479). Maintain BUY.

Public & Others

25.69

Consolidated Financial Summary

Source : BSE

Navin Matta
navin.matta@hdfcsec.com
+91-22-6171-7322
Sneha Prashant
sneha.prashant@hdfcsec.com
+91-22-6171-7336

(Rs bn)
Net Sales
EBITDA
APAT
Diluted EPS (Rs)
P/E (x)
EV / EBITDA (x)*
RoE (%)

4QFY16
807
131
52
15.4

4QFY15
678
93
19
5.8

YoY (%)
19.0
41.6
177.7
163.2

3QFY16
723
102
35
10.2

QoQ (%)
11.7
28.0
50.6
50.6

FY15
2,628
395
145
45.0
9.4
4.5
23.8

FY16P
2,756
374
138
40.6
10.4
4.9
20.1

FY17E
3,001
436
170
49.9
8.4
4.3
19.1

FY18E
3,331
487
201
59.2
7.1
3.7
18.9

Source: Company, HDFC sec Inst Research. * EV/EBITDA on adjusted basis please refer page to page 11 for details

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

TATA MOTORS: RESULT REVIEW 4QFY16

Quarterly Financials Snapshot (Consolidated)

Consolidated topline was 4%
ahead of expectations

EBITDA margin improvement

of 200bps QoQ was largely
driven by JLRs 180bps QoQ
margin expansion
Despite adjusting for
provision owing to Takata
airbag related recalls, other
expenses/sales rose 130bps
QoQ

APAT at Rs 52.1bn was ahead

on strong operational beat,
lower-than-expected
depreciation and higher other
income

(Rs mn)
Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Depreciation
EBIT
Other Income
Interest Cost
Product Development Cost
PBT
Tax
RPAT
Minority Interest
Profit/(Loss)In Associate Companies
APAT after MI
EO Items (Adj For Tax)
RPAT

4QFY16
806,844
464,923
77,702
133,197
131,022
44,239
86,783
2,486
12,552
10,735
65,982
13,546
52,436
383
89
52,142
371
51,771

4QFY15
677,777
405,185
67,831
112,259
92,503
38,568
53,935
2,452
18,946
8,120
29,322
10,236
19,086
339
30
18,777
1,612
17,165

YoY (%)
19.0
14.7
14.6
18.7
41.6
14.7
60.9
1.4
(33.7)
32.2
125.0
32.3
174.7
13.0
201.4
177.7
(77.0)
201.6

3QFY16
722,564
435,890
74,380
109,930
102,365
43,391
58,974
1,806
10,915
8,565
41,300
6,513
34,787
204
36
34,618
(457)
35,075

QoQ (%)
11.7
6.7
4.5
21.2
28.0
2.0
47.2
37.7
15.0
25.3
59.8
108.0
50.7
87.5
150.4
50.6
(181.3)
47.6

4QFY16
57.6
9.6
16.5
16.2
20.5
6.4

4QFY15
59.8
10.0
16.6
13.6
34.9
2.5

YoY (bps)
(216)
(38)
(5)
259
(1,438)
388

3QFY16
60.3
10.3
15.2
14.2
15.8
4.9

QoQ (bps)
(270)
(66)
129
207
476
156

Source: Company, HDFC sec Inst Research

Margin Analysis (Consolidated)

Material Expenses As % Of Net Sales
Employee Expenses As % Of Net Sales
Other Expenses As % Of Net Sales
EBITDA Margin (%)
Net Profit Margin (%)
Tax Rate (%)
Source: Company, HDFC sec Inst Research

Page | 2

TATA MOTORS : RESULT REVIEW 4QFY16

Quarterly Financials Snapshot (Standalone)

Standalone topline growth of
18% YoY was marginally
lower than estimates on
lower-than-expected rise in
net ASPs (~5% QoQ)

EBITDA margin improved

240bps QoQ led by gross
margins expansion of 400 bps
QoQ, partially offset by higher
other expenses
The outlook for the
standalone business is
improving with continued
growth in MHCVs, recovery in
LCV demand and a good
response for Tiago (~20k
bookings)

The company hopes to

turnaround its PV business
with two new launches every
year till 2020

(Rs mn)
CV (Domestic, in units)
PV (Domestic, in units)
Exports (in units)
Total Volumes (in units)
Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Depreciation
EBIT
Other Income
Interest Cost
Product Development Cost
PBT
Tax
APAT pre MI
Minority Interest
APAT after MI
EO Items (Adj For Tax)
RPAT
Adj EPS

4QFY16
99,487
30,144
17,135
1,46,766
1,25,698
84,891
7,445
23,144
10,217
6,140
4,077
1,297
3,438
1,254
682
(953)
1,635
1,635
(3,015)
4,650
0.5

4QFY15
84,126
41,853
13,291
1,39,270
1,07,858
77,050
8,362
19,453
2,993
8,233
(5,240)
831
4,709
1,403
(10,521)
78
(10,600)
(10,600)
1,043
(11,643)
(3.3)

YoY (%)
18.3
(28.0)
28.9
5.4
16.5
10.2
(11.0)
19.0
241.3
(25.4)
(177.8)
56.1
(27.0)
(10.6)
(106.5)
(1,317.5)
(115.4)
(115.4)
(389.1)
(139.9)
(115.6)

4QFY16
67.5
5.9
18.4
8.1
(139.8)
1.3

4QFY15
71.4
7.8
18.0
2.8
(0.7)
(9.8)

YoY (bps)
(390)
(183)
114.7
535
(13,902)
1,113

3QFY16
78,294
31,384
12,699
1,22,377
1,00,006
71,596
7,811
14,913
5,686
6,054
(368)
4,733
3,456
1,073
(164)
(24)
(141)
(141)
1,868
(2,009)
(0.0)

QoQ (%)
27.1
(4.0)
34.9
19.9
25.7
18.6
(4.7)
55.2
79.7
1.4
(1,208.2)
(72.6)
(0.5)
16.9
(515.2)
3,922.4
(1,263.2)
(1,263.2)
(261.4)
(331.5)
(1,263.2)

Source: Company, HDFC sec Inst Research

Margin Analysis (Standalone)

Material Expenses % Net Sales
Employee Expenses % Net Sales
Other Operating Expenses % Net Sales
EBITDA Margin (%)
Tax Rate (%)
APAT Margin (%)

3QFY16
71.6
7.8
14.9
5.7
14.4
(0.1)

QoQ (bps)
(406)
(189)
350
244
(15,418)
144

Source: Company, HDFC sec Inst Research

Page | 3

TATA MOTORS : RESULT REVIEW 4QFY16

JLRs topline was above

expectations owing to net
ASP rise on sequential basis

Gross margin improved QoQ

owing to lower commodity
prices and favourable variant
mix for newly launched
models
JLRs EBITDA margin was
above estimate even while
regional/model mix was
weaker and FX impact was
neutral
China JV profits more than
doubled QoQ despite flat
volumes

Quarterly Financials Snapshot (JLR - IFRS)

In GBP mn
Retail Volumes (000 units)
Wholesale Volumes Ex-CJLR (000 units)
Revenue
Material Expenses
Employee Expenses
Other Operating Expenses
Product Development Expense
EBITDA (Adjusted)
Interest Cost
Depreciation
Debt/Unrealised MTM Loss/(Gain)
Share Of Profit/(Loss) From JV
PBT
Exceptional Item
Tax
APAT
RPAT

4QFY16
158.8
149.9
6,594
3,828
648
1,347
(298)
1,069
13
378
42
49
685
(108)
105
580
472

4QFY15
126.4
125.2
5,826
3,417
550
1,151
(308)
1,016
92
308
220
396
94
302
302

YoY (%)
25.7
19.8
13.2
12.0
17.8
17.0
(3.2)
5.2
(85.9)
22.7
(80.9)
73.0
11.7
92.1
56.3

3QFY16
137.7
137.6
5,781
3,496
582
1,192
(323)
834
10
357
20
22
469
30
59
410
440

QoQ (%)
15.4
8.9
14.1
9.5
11.3
13.0
(7.7)
28.2
30.0
5.9
110.0
122.7
46.1
(460.0)
78.0
41.5
7.3

4QFY16
58.1
9.8
20.4
16.2
8.8
15.3

4QFY15
58.7
9.4
19.8
17.4
5.2
23.7

YoY (bps)
(59.8)
38.7
67.1
(122.7)
361.2
(840.9)

3QFY16
60.5
10.1
20.6
14.4
7.1
12.6

QoQ (bps)
(242.1)
(24.0)
(19.2)
178.5
170.4
274.9

Source: Company, HDFC sec Inst Research

Margin Analysis (JLR IFRS)

JLR generated strong FCF of
GBP 1393mn in 4Qwith
improvement in working
capital

Material Expenses As % Of Net Sales

Employee Expenses As % Of Net Sales
Other Expenses As % Of Net Sales
EBITDA Margin (%)
Net Profit Margin (%)
Tax Rate (%)
Source: Company, HDFC sec Inst Research

Page | 4

TATA MOTORS : RESULT REVIEW 4QFY16

JLR: Key Financial Highlights / Model Assumptions

We have raised our FY17/18E
EBITDA estimates as we build
in higher margins based on
strong 4Q

Outlook for JLR volume

growth appears healthy with
its new product cycle

In view of China JVs profits

improving in 4QFY16, we
have increased our estimates
for JLRs share of profits

in Mn
Revenue
% YoY
Wholesales Volumes Incl CJLR (in '000)
% growth
Net ASP
% YoY
Expenditure
Material Cost
% Of Sales
Employee Cost
% Of Sales
Other Expenses
% Of Sales
Add back R&D Cost
% Of Sales
R&D Cost Expensed
Total
% Of Sales
EBITDA
EBITDA margin %
Other Income
Depreciation And Amortisation
Interest Expense
Forex gain/(loss)
Share Of Profit/(Loss) From Joint Venture
% Of Sales
PBT
% Of Sales
Tax
Tax rate %
APAT
% Of Sales
RPAT
% Of Sales

FY14
19,386
22.8
430
15.5
45,098
6.3

FY15
21,866
12.8
471
9.5
46,875
3.9

FY16
22,208
1.6
544
15.6
43,602
(7.0)

FY17E
24,666
11.1
628
15.3
43,851
0.6

FY18E
27,138
10.0
695
10.8
44,976
2.6

11,904
61.4
1,654
8.5
3,465
17.9
(1,266)
(6.5)
236
15,993
82.5
3,393.0
17.5
875
147
137
(7)
(0.0)
2,501
12.9
622
24.9
1,879
9.7
1,879
9.7

13,185
60.3
1,977
9.0
3,730
17.1
(1,411)
(6.5)
253
17,734
81.1
4,132.0
18.9
1,051
87
(373)
(7)
(0.0)
2,614
12.0
576
22.0
2,038
9.3
2,038
9.3

13,146
59.2
2,321
10.5
4,670
21.0
(1,560)
(7.0)
318
18,895
85.1
3,313.0
14.9
1,403
54
(27)
66
0.3
1,895
8.5
247
13.0
1,649
7.4
1,326
6.0

14,652
59.4
2,541
10.3
5,039
20.4
(1,750)
(7.1)
350
20,831
84.5
3,834.9
15.5
1,655
45
111
0.5
2,246
9.1
515
22.9
1,731
7.0
1,731
7.0

16,174
59.6
2,768
10.2
5,427
20.0
(1,820)
(6.7)
364
22,914
84.4
4,224.8
15.6
1,834
45
170
0.6
2,515
9.3
567
22.5
1,948
7.2
1,948
7.2

Source: Company, HDFC sec Inst Research

Page | 5

TATA MOTORS : RESULT REVIEW 4QFY16

Standalone: Key Financial Highlights/ Model Assumptions

Expect healthy volume

growth across the CV and PV
segments for TTMT in FY17

Expect EBITDA margins also

to expand with operating
leverage benefits

Rs in Mn
Vehicle Sales (in units)
CV (Domestic)
PV (Domestic)
Exports
Total
% YoY
Net Sales
% YoY
Other Operating Income
Total Income From Operations
Expenditure
RM Cost
% Of Sales
Employee Cost
% Of Sales
Other
% Of Sales
Total Expenses
% Of Sales
EBITDA
EBITDA Margin %
Other Income
Product Development Expenses
Depreciation
Interest
PBT (Pre-exceptional Items)
PBT (Pre-exceptional And JLR Dividend)

FY14

FY15

FY16

FY17E

FY18E

381,412
135,287
49,892
566,591
(30.0)
339,070
(23.6)
3,811
342,881

329,943
133,304
49,917
513,164
(9.4)
358,905
5.8
4,042
362,948

327,730
125,945
57,991
511,666
(0.3)
419,480
16.9
4,218
423,698

381,300
148,100
65,621
595,021
16.3
503,828
20.1
4,640
508,468

429,514
173,100
71,742
674,356
13.3
585,839
16.3
5,104
590,943

259,144
76.4
28,777
8.5
59,784
17.6
347,705
93.0
(4,824)
(1.4)
18,669
4,287
20,703
13,532
(24,677)
(38,230)

270,417
75.3
30,915
8.6
66,518
18.5
367,849
94.0
(4,901)
(1.4)
18,815
4,375
26,032
16,117
(32,610)
(47,460)

295,953
70.6
30,267
7.2
70,076
16.7
396,296
85.7
27,402
6.5
14,765
4,246
24,538
14,811
(1,427)
(15,745)

356,944
70.8
34,564
6.9
78,654
15.6
470,162
84.5
38,306
7.6
17,188
4,500
27,492
13,196
10,306
(4,094)

416,615
71.1
38,200
6.5
85,775
14.6
540,590
83.6
50,353
8.6
17,645
5,000
29,960
12,889
20,149
5,749

Source: Company, HDFC sec Inst Research

Page | 6

TATA MOTORS : RESULT REVIEW 4QFY16

With a 5-6% uptick in our

consolidated earnings and
lower debt assumption, our
TP has been revised to Rs 524

SOTP Valuation
Standalone
JLR
China JV
Other Subsidiaries
Less: Net Automotive Debt
Target Price

Valuation methodology
EV / EBIDTA on Mar 18E
EV / EBIDTA on Mar 18E
EV / EBIDTA on Mar 18E
P/E, PBV on Mar 18E

Multiple
8.0
4.0
4.0

Per share
119
371
35
28
28
524

Source: HDFC sec Inst Research

Our earnings upgrade (~6%)

has been largely driven by
JLRs strong operating
performance in 4QFY16

Change In Estimates
In Rs bn
Net Sales
EBITDA
Adj PAT
Adj EPS

New
FY17E
3,001
436
170
49.9

FY18E
3,331
487
201
59.2

Old
FY17E
3,027
427
159
46.9

FY18E
3,359
476
190
56.0

% chg
FY17E
(0.8)
2.1
6.5
6.5

FY18E
(0.9)
2.4
5.7
5.7

Source: HDFC sec Inst Research

Page | 7

TATA MOTORS : RESULT REVIEW 4QFY16

40
20

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1QFY15

4QFY14

3QFY14

2QFY14

17

20

20

18

16

21

22

29

18

26

25

24

30

27

28

16

15

19

18

14

0.0%

16

21

21

16

15

15
20

17

16

20

14

25

27

27

13
20

11

11

14
23

21

22

19

25

19

24

Source: Company, HDFC sec Inst Research

Source: Company, HDFC sec Inst Research

TTMTs MHCV Market Share Declined

TTMTsPV Market Share Improved Sequentially

Volumes (in '000)

Volumes (in '000)

M/S - RHS

M/S - RHS

60

60.0%

60

10.0%

50

55.0%

50

9.0%

40

8.0%

30

7.0%

20

6.0%

40

50.0%

30

45.0%

20

Source: SIAM, HDFC sec Inst Research

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1QFY15

4QFY14

4QFY16

3QFY16

2QFY16

4.0%

1QFY16

4QFY15

35.0%

3QFY15

0
2QFY15

5.0%

1QFY15

10

4QFY14

40.0%

3QFY14

10

2QFY14

TTMTs MHCV market share

fell to ~50% with severe
pricing competition by newer
players

21

3QFY14

China mix was stable after

witnessing fall over the past
many quarters. Demand
conditions have improved, as
per JLR

17

60

5.0%
0.0%

19

4QFY16

10.0%

20

3QFY16

15.0%

22

2QFY16

40.0%

21

1QFY16

20.0%

20

4QFY15

25.0%

22

80

30.0%

60.0%

ROW

23

3QFY15

80.0%

Europe

100

2QFY15

35.0%

China

1QFY15

40.0%

NA

3QFY14

100.0%

20.0%

The management expects

both RR/RRS to clock decent
volume growth in FY17

UK

Share of RR+RRS % - RHS

2QFY14

With an increase in share of

recently launched models
including XE/Discovery Sport,
the share of highly profitable
models (RR + RRS) witnessed
a decline

Land Rover

2QFY14

Jaguar

JLR:UK Mix Rose QoQ

4QFY14

JLR Model Mix Slightly Weaker

Source: SIAM, HDFC sec Inst Research

Page | 8

TATA MOTORS : RESULT REVIEW 4QFY16

Peer Valuations

Ashok Leyland
Atul Auto
Bajaj Auto
Eicher Motors
Hero Motocorp
M&M
Maruti Suzuki
SML Isuzu
Tata Motors

Mcap
(Rs bn)

CMP
(Rs/sh)

Rating

TP

302
11
755
507
618
787
1,230
14
1,430

106
485
2,609
18,721
3,094
1,332
4,073
957
421

NEU
BUY
NEU
NEU
BUY
NEU
BUY
NEU
BUY

100
663
2,685
19,633
3,325
1,394
4,564
1,086
524

Adj EPS (Rs/sh)

P/E (x)
EV/EBITDA (x)
RoE (%)
FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E
3.9
5.4
6.4
27.2
19.6
16.4
14.5
11.0
9.4
20.9
26.0
27.1
22.0
26.9
33.1
22.0
18.0
14.6
13.2
10.5
8.5
35.0
33.7
32.8
126.2 141.4 158.8
20.7
18.5
16.4
13.9
12.0
10.4
31.8
31.2
30.9
470.7 609.4 829.1
39.8
30.7
22.6
20.3
17.0
12.4
34.7
41.3
41.1
156.8 172.4 190.0
19.7
17.9
16.3
13.1
11.6
10.3
43.1
39.6
37.6
59.7
68.5
77.7
22.3
19.4
17.1
14.0
12.1
10.5
16.8
17.2
17.5
153.9 192.8 228.2
26.5
21.1
17.8
13.5
12.2
10.2
18.3
20.0
20.6
35.3
52.7
67.9
27.1
18.2
14.1
16.6
11.7
8.9
15.9
20.7
22.8
37.5
46.9
56.0
11.2
9.0
7.5
5.7
4.8
4.1
19.8
19.8
19.7

Source: Company, HDFC sec Inst Research*Tata Motors EV/EBITDA based on EV less net auto debt and adjusted EBITDA (normalised R&D spends in line with luxury car makers)

Page | 9

TATA MOTORS : RESULT REVIEW 4QFY16

Income Statement : Consolidated

(Rs bn)
Net Revenues
Growth (%)
Material Expenses
Employee Expenses
Product Development Exps
Other Operating Expenses
EBITDA
EBITDA Margin (%)
EBITDA Growth (%)
Depreciation
EBIT
Other Income
Interest
PBT
Tax (Incl Deferred)
Minority Interest
Profit from Associate Cos
APAT
APAT Growth (%)
Adjusted EPS (Rs)
EPS Growth (%)
EO (Loss) / Profit (Net Of Tax)
RPAT

FY14
2,328
23.3
1,436
216
26
303
348
15.0
41.6
111
238
8
47
199
48
(1)
(1)
150
42.7
46.5
41.4
(10)
140

Source: Company, HDFC sec Inst Research

Balance Sheet : Consolidated

FY15
2,628
12.9
1,599
255
29
349
395
15.0
13.5
134
262
9
49
222
76
(1)
0
145
(3.3)
45.0
(3.3)
(5)
140

FY16
2,756
4.9
1,624
292
35
431
374
13.6
(5.4)
170
204
10
46
167
29
(1)
0
138
(4.8)
40.6
(9.8)
(28)
110

FY17E
3,001
8.9
1,785
309
37
433
436
14.5
16.6
192
245
9
39
214
54
(1)
10
170
23.0
49.9
23.0
170

FY18E
3,331
11.0
1,992
338
39
474
487
14.6
11.7
211
276
9
39
246
60
(1)
16
201
18.5
59.2
18.5
201

(Rs bn)
SOURCES OF FUNDS
Share Capital - Equity
Reserves
Total Shareholders Funds
Minority Interest
Long-term Debt
Short-term Debt
Total Debt
Net Deferred Taxes
Long-term Provisions & Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Goodwill
Investments
LT Loans & Advances
Total Non-current Assets
Inventories
Debtors
Cash & Equivalents
Total Current Assets
Creditors
Other Current Liabilities & Provns
Total Current Liabilities
Net Current Assets
TOTAL APPLICATION OF FUNDS

FY14

FY15

FY16P

FY17E

FY18E

6
650
656
4
606
606
(8)
202
1,461

6
556
563
4
736
736
(14)
212
1,501

7
801
808
9
705
705
4
205
1,731

7
961
968
10
735
735
10
220
1,942

7
1,150
1,157
10
752
752
16
228
2,162

641
336
50
11
367
1,405
273
106
393
771
716

838
289
47
12
293
1,479
293
126
462
881
858

1,003
285
48
13
331
1,681
334
130
521
985
935

1,183
284
48
13
365
1,893
392
153
459
1,005
956

1,341
288
48
13
395
2,086
428
167
488
1,083
1,007

716
55
1,461

858
22
1,501

935
50
1,731

956
49
1,942

1,007
77
2,162

Source: Company, HDFC sec Inst Research

Page | 10

TATA MOTORS : RESULT REVIEW 4QFY16

Cash Flow: Consolidated

(Rs bn)
Reported PBT
Non-operating & EO items
Interest expenses
Depreciation
Working Capital Change
Tax Paid
OPERATING CASH FLOW ( a )
Capex
Free Cash Flow (FCF)
Investments
Non-operating Income
INVESTING CASH FLOW ( b )
Debt Issuance/(Repaid)
Interest Expenses
FCFE
Share Capital Issuance
Dividend
FINANCING CASH FLOW ( c )
NET CASH FLOW (a+b+c)
EO Items, Others
Closing Cash & Equivalents
Source: Company, HDFC sec Inst Research

Key Ratios: Consolidated

FY14
189
(10)
47
111
25
(48)
314
(400)
(86)
(4)
159
(245)
71
(47)
(63)
4
(7)
20
88
393

FY15
222
(5)
49
134
187
(76)
510
(281)
230
1
(7)
(286)
130
(49)
311
(233)
(152)
72
(3)
462

FY16P
167
(28)
46
170
(14)
(29)
313
(333)
(20)
0
22
(311)
(31)
(46)
(98)
136
(1)
57
59
521

FY17E
214
39
192
(79)
(54)
312
(370)
(58)
16
(354)
30
(39)
(68)
(10)
(19)
(62)
459

FY18E
246
39
211
(21)
(60)
415
(374)
41
22
(352)
17
(39)
19
(12)
(34)
29
488

PROFITABILITY (%)
GPM
EBITDA Margin
APAT Margin
RoE
RoIC (or Core RoCE)
RoCE
EFFICIENCY
Tax Rate (%)
Fixed Asset Turnover (x)
Inventory (days)
Debtors (days)
Payables (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E (x)
Interest Coverage (x)
PER SHARE DATA (Rs)
EPS
CEPS
Dividend
Book Value
VALUATION
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Revenues (x)
OCF/EV (%)
FCF/EV (%)
FCFE/Mkt Cap (%)
Dividend Yield (%)

FY14

FY15

FY16P

FY17E

FY18E

38.3
15.0
6.4
29.0
20.7
16.8

39.1
15.0
5.5
23.8
17.0
13.6

41.1
13.6
5.0
20.1
14.9
12.4

40.5
14.5
5.6
19.1
13.6
12.4

40.2
14.6
6.0
18.9
13.4
12.8

24.0
1.8
42.8
16.6
112.2
(52.9)
1.7
0.1
5.0

34.4
1.7
40.7
17.5
119.2
(61.1)
1.9
0.2
5.4

17.2
1.4
44.2
17.2
123.8
(62.4)
1.9
0.0
4.4

25.3
1.3
47.7
18.7
116.3
(49.9)
1.7
0.1
6.2

24.6
1.3
47.0
18.3
110.3
(45.1)
1.5
0.1
7.1

46.5
72.7
2.0
118.0

45.0
78.8
203.8

40.6
75.0
0.2
174.8

49.9
97.9
2.5
237.9

59.2
112.1
3.0
284.9

9.0
3.6
4.9
0.6
22.5
(6.2)
(4.7)
0.5

9.4
2.1
4.5
0.6
34.9
15.7
22.9
-

10.4
2.4
4.9
0.5
21.5
(1.4)
(6.9)
0.0

8.4
1.8
4.3
0.5
20.4
(3.8)
(4.7)
0.6

7.1
1.5
3.7
0.4
27.7
2.7
1.3
0.7

Source: Company, HDFC sec Inst Research * EV/EBITDA based on EV less net auto debt and
adjusted EBITDA (normalised R&D spends in line with luxury car makers).

Page | 11

TATA MOTORS : RESULT REVIEW 4QFY16

RECOMMENDATION HISTORY
Tata Motors

700

Date
10-Jul-15
8-Aug-15
23-Sep-15
7-Nov-15
12-Feb-16
12-May-16
31-May-16

TP

600
500

400

CMP
398
393
316
396
276
380
421

Reco
BUY
BUY
BUY
BUY
BUY
BUY
BUY

Target
577
515
445
435
434
479
524

300

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

200

Rating Definitions
BUY: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL: Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Page | 12

TATA MOTORS : RESULT REVIEW 4QFY16

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Page | 13