Tech Mahindra

BUY

- 1 of 6 - Tuesday 27th March, 2012

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STO

CK

PO

INTE

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Target Price `338

CMP `300.4 FY13 PE 7.6x

Index Details Global volumes of JLR continued to surprise (+51% yoy) and stood at 36,471 units in March’12. The growth momentum in volumes is expected to continue in the coming year led by the robust demand of the recently launched Evoque and steady performance of the existing JLR portfolio. Further, JLR which has a capacity of 3,60,000 units on a double shift basis, has started production on a three shift basis in some of its plants which can take the production to 4,10,000 units. We expect JLR to post a volume growth of 26% in FY13 and touch ~3,98,000 units. JLR also has a strong product pipeline of 40 new variants over a period of 5 years. Launches in the near term include a new Defender and a Range Rover platform. We value Tata Motors on SOTP valuation based price objective of Rs. 338 (revised from previous target of Rs 292).

SOTP Valuation Company FY 13 EPS Multiple Measure Value per share Tata Motors Standalone 4.6 11 P/E 50.6 Jaguar Land Rover 36.0 8 P/E 270.0 Tata Motors Finance 7.3 (BV) 1.5 P/B 10.9 Tata Technologies 0.4 9 P/E 3.8 Tata Daewoo 0.3 9 P/E 2.5 Target Price 338

Sensex 17,151 Nifty 5,243 BSE 100 9,085 Industry CV & PV

Scrip Details Mkt Cap (` Cr) 80,848

BVPS (`) 75 O/s Shares (Cr) 269.1 Avg Vol (Lacs) 13.3 52 Week H/L 305/138 Div Yield (%) 1.3

FVPS (`) 2.0

Shareholding Pattern Shareholders % Promoters 35.1 DIIs 14.6 FIIs 24.2 Public 26.1 Total 100

Tata Motors vs. Sensex

Key Financials (` in Cr)

Y/E Mar Net Revenue EBITDA PAT EPS EPS Growth

(%) RONW

(%) ROCE

(%) P/E (X) EV/ EBITDA(X)

2011 92519.3 7010.9 2571.1 8.1 - 30.7 22.0 37.0 16.7 2012E 123133.3 16514.5 9273.6 29.2 260.7 48.1 32.6 10.3 7.1 2013E 167326.8 23042.3 11265.0 35.5 21.5 38.6 31.3 8.5 5.1 2014E* 213347.9 29589.8 18350.4 57.8 62.9 39.8 33.5 5.2 4.0

JLR Monthly Volumes

Source: Tata Motors, Ventura Research Estimates

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Financials and Projections (Consolidated)

Ventura Securities Limited Corporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai – 400079 This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities

Y/E March, Fig in Rs. Cr FY 2010 FY 2011 FY 2012e FY 2013e Y/E March, Fig in Rs. Cr FY 2010 FY 2011 FY 2012e FY 2013eProfit & Loss Statement Per Share Data (Rs)Net Sales 92519.3 123133.3 167326.8 213347.9 EPS 8.1 29.2 35.5 57.8% Chg. 33.1% 35.9% 27.5% Cash EPS 20.4 43.9 52.3 77.5Total Expenditure 85508.4 106618.8 144284.5 183758.1 DPS 3.0 4.0 4.0 4.0% Chg. 24.7% 35.3% 27.4% Book Value 25.9 60.4 91.4 144.6EBDITA 7010.9 16514.5 23042.3 29589.8 Capital, Liquidity, Returns RatioEBDITA Margin % 7.6 13.4 13.8 13.9 Debt / Equity (x) 4.3 1.7 1.5 1.0Other Income 3123.8 732.4 992.8 1238.7 Current Ratio (x) 1.0 1.1 1.2 1.3Exceptional Items -259.6 231.0 -660.0 0.0 ROE (%) 30.7 48.1 38.6 39.8PBDIT 9875.1 17478.0 23375.1 30828.5 ROCE (%) 22.0 32.6 31.3 33.5Depreciation 3887.1 4655.5 5343.7 6231.7 Dividend Yield (%) 1.0 1.3 1.3 1.3Interest 2465.3 2385.3 3693.8 3722.0 Valuation Ratio (x)PBT 3522.6 10437.2 14337.6 20874.7 P/E 37.0 10.3 8.5 5.2Tax Provisions 1005.8 1216.4 3139.3 2609.3 P/BV 11.6 5.0 3.3 2.1PAT 2516.9 9220.8 11198.3 18265.4 EV/Sales 1.3 1.0 0.7 0.5Minority Interest & Others 54.2 52.8 66.7 85.0 EV/EBIDTA 16.7 7.1 5.1 4.0Consolidated Net Profit 2571.1 9273.6 11265.0 18350.4 Efficiency Ratio (x)PAT Margin (%) 2.7 7.5 6.7 8.6 Inventory (days) 44.9 41.9 42.0 42.0Raw Materials / Sales (%) 67.0 64.6 66.5 66.5 Debtors (days) 28.6 20.5 20.0 20.0Tax Rate (%) 28.6 11.7 12.0 12.5 Creditors (days) 135.4 110.7 110.0 110.0

Balance Sheet Cash Flow statementShare Capital 570.6 637.7 637.7 637.7 Profit After Tax 2571.1 9273.6 11265.0 18350.4Reserves & Surplus 7635.9 18533.8 28348.1 45247.8 Depreciation 3887.1 4655.5 5343.7 6231.7Minority Interest & Others 213.5 246.6 296.6 360.4 Working Capital Changes 4626.0 -1431.8 1692.4 2355.9Total Loans 35299.5 32791.4 43973.3 44399.2 Others -3391.4 -504.6 45.6 55.9Deferred Tax Liability 1153.6 1463.8 1463.8 1463.8 Operating Cash Flow 7692.8 11992.7 18346.7 26993.9Total Liabilities 44873.1 53673.3 74719.5 92108.9 Capital Expenditure -5057.6 -7802.1 -16000.0 -15000.0Goodwill 0.0 0.0 0.0 0.0 Change in Investment 655.4 -3138.1 -394.2 -32.0Gross Block 67245.67 75047.7 91047.7 106047.7 Cash Flow from Investing -4402.28 -10940.1 -16394.2 -15032.0Less: Acc. Depreciation 34232.4 39698.7 45042.4 51274.1 Proceeds from equity issue 1404.8 4703.2 0.0 0.0Net Block 33013.3 35349.1 46005.3 54773.6 Inc/ Dec in Debt 325.7 -2508.1 11181.9 425.9Capital Work in Progress 8915.9 11728.9 10500.0 10500.0 Dividend and DDT -344.9 -990.2 -1450.7 -1450.7Investments 2219.1 2544.3 4167.3 4199.3 Cash Flow from Financing 1385.6 1204.9 9731.2 -1024.8Net Current Assets 724.8 4051.1 14042.4 22623.6 Net Change in Cash 4676.2 2257.4 11683.7 10937.1Misc Expenses 0.0 0.0 0.0 0.0 Opening Cash Balance 4121.3 8743.3 10947.9 22631.6Total Assets 44873.1 53673.3 74719.5 92108.8 Closing Cash Balance 8797.5 11000.8 22631.6 33568.7

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mentioned in their articles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the above information/articles. Reproduction in whole or in part without written permission is prohibited. This report is for private circulation.