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FUNDAMENTAL
ST CK

Federal Bank Ltd. ¡ The automotive environment is now more
challenging with the shift to electrification,
Buy Target Price Rs 472 greater geopolitical uncertainty (e.g. Brexit)
Value Parameters and softer markets in the UK and US with
500570 more competitive conditions generally.
BSE Code TATA MOTORS
NSE Symbol ¡ As previously indicated, JLR expects
CMP (As on 01st Dec, 2017) Rs 399 margin pressures seen in FY17, including
Face Value Rs 2 higher incentive levels and launch and
52 Week High/Low growth costs, to continue in FY18.
Market Cap (Rs cr) Rs 358/552
EPS (TTM) 1,38,329 ¡ Profitability by quarter will continue to
PE Ratio (x) 34.82 reflect seasonality and launch timing, with
13.63 prior model Range Rover and Range Rover
Sport running out in Q3 and a very strong
Shareholding Pattern % (Sep’ 17) pipeline of exciting new products expected
Promoters Dlls FIIs Other to ramp up in Q4 and beyond.

Others Promoter Focus of standalone business is to achieve
25.7% 36.4% PAT breakeven, as a combination of sales
enhancement and rigorous cost reduction.
DII FII Some of the initiatives are as follows:
15.3% 22.6% ¡ Network expansion.
¡ Cost reduction initiatives in areas of
Company Overview
Tata Motors Ltd is one of India's largest automobile material cost, variable costs, fixed costs, etc.
company. They are the leader in commercial ¡ Improvement of supplier base.
vehicles in each segment, and among the top three ¡ CV demand is expected to remain robust,
in passenger vehicles with winning products in the
compact, midsize car and utility vehicle segments. led by macro factors such as government
The company is the world's fourth largest truck thrust on infrastructure, restriction on
manufacturer, and the world's second largest bus overloading and growth in e-commerce
manufacturer. segments.
Investment Rationale
¡ JLR’s strategy is to achieve sustainable profitable Concern

growth by investing proportionally more in new Downside risks to our rating and price target
products, technology and manufacturing capacity. include:

5 ARIHANT CAPITAL ¡ dECembER 2017 1) Any macro shock that disrupts luxury car
growth in any global market;

2) Lower-than-anticipated earnings;

3) Slower-than-anticipated take-up for new
model launches.

Valuations

Our fair value for Tata Motors based on SOTP
is coming at Rs 472 per share. We have BUY
rating on this stock.