Motilal Oswal Financial Services

23 February 2021

Company update | Sector: Automobiles

Tata Motors

BSE SENSEX

49,744

S&P CNX

14,676

CMP: INR304

TP: INR390(+28%)

India business transformation underway

Buy

Stock Info

Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

Free float (%)

Aspiring to lead EV disruption | Hopeful of achieving zero debt by FY24

TTMT IN

3,598

1000.7 / 14.2

342 / 64

3/122/71

12808

53.6

Financials Snapshot (INR b)

Y/E March

2020 2021E 2022E

Net Sales

2,611 2,469 3,084

EBITDA

239.1 313.7 431.9

Adj. PAT

-90.9 -29.4

78.1

Adj. EPS (INR)

-25.3

-7.7

20.4

EPS Gr. (%)

480 -69.6 -365.4

BV/Sh. (INR)

175.3 162.9 183.3

Ratios

Net D/E (x)

1.6

1.4

RoE (%)

-14.8

-4.7

11.8

RoCE (%)

3.7 -36.0

10.7

Payout (%)

0.0

Valuations

P/E (x)

-12.0 -39.6

14.9

P/BV (x)

1.7

1.9

1.7

EV/EBITDA (x)

6.7

5.7

3.7

Div. Yield (%)

0.0

FCF Yield (%)

-2.7 -16.1

18.0

Tata Motors (TTMT) hosted its India Business Investors Day (click

here for the

presentation)

in which it presented its strategy to meet its aspiration of: a) leading the CV

industry with across cycle double-digit margin, b) sustainably improving its position in the

PV industry with a high single-digit margin, c) lead the EV disruption, and d) attain zero

debt by FY24. We present below our key takeaways from this meeting:



The CV industry is expected to grow by 36-38% in FY22, with M&HCVs growing at 60-

65%. LCVs and Pick-ups could see slower growth (as they didn’t fall as much).



Its strategy to recover lost market share in the LCV business hinges on: a) ACE

petrol/CNG in small SCVs, b) Intra platform ramp-up in small Pick-ups, c) Yoddha

brand in large Pick-ups, and d) deepening its rural reach.



The CV business would aim to achieve: a) double-digit EBITDA margin across the

product cycle, b) sustainable capex at 3-4% of sales, and c) strong positive FCF.



The PV business is targeting double-digit market share and leadership in SUVs and

EVs, high single-digit EBITDA in three years, FCF breakeven in FY23 and positive FCF

thereafter, and sustainable capex at 5-6% of sales.



The Hornbill (small SUV) will be launched in CY21 and would create a new segment. It

would be targeted towards hatchback buyers (premium hatches). It is expected to

significantly drive volumes and market share for TTMT.



Higher fuel prices, increasing upfront cost for ICE PVs, falling battery prices, and

increasing choices in EVs for customers may bring forward the inflection point in EVs.

Hence, it expects 7-10% EVs penetration in PVs in 3-4 years and EVs to form 15-20%

of TTMT’s PV volumes. It expects CVs for last-mile connectivity to see faster

electrification. Hence, it expects SCVs to see 15-20% EV penetration by FY25. It is

leveraging on synergies with group companies to bolster its EV ecosystem and

support phased localization.



It maintained plans to attain zero debt (excluding leases) by FY24 through strong

operating cash flows and divestments.

CV Business: Cyclical recovery underway; targeting double-digit margin



The outlook for FY22 is positive as tailwinds are likely to be stronger than

headwinds. TTMT expects the overall domestic CV industry to grow by 36-38%

in FY22, with M&HCV growing at 60-65%. LCVs and Pick-ups could see slower

growth (as they didn't fall as much). FY19 peaks may be scaled only in 2-3 years

after FY22. In the past cycle, it had taken 3-5 years.

Replacement demand is yet to return due to: a) apprehension on the viability of

BS-VI technology, and b) increase in the CV population. Demand is driven by

freight growth. The latter should be good as economies recover. Also, recovery

in Infra and Real Estate will be supportive.

The CV business would aim to achieve: a) double-digit EBITDA margin across the

product cycle, b) sustainable capex at 3-4% of sales, and c) strong positive FCF.

Jinesh Gandhi – Research Analyst

(Jinesh@MotilalOswal.com)

Vipul Agrawal – Research Analyst

(Vipul.Agrawal@motilaloswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Tata Motors

Planned LCV market share recovery driven by four initiatives



It lost market share in LCVs due to its over dependence on SCVs (85% of its SCV

volumes are from ACE diesel) and the market shifting to bigger products (2-3.5

tonne segment), where it had a weak presence. To recover lost market share in

the LCV segment, the management now has a product and distribution-led

strategy targeting each sub-segment.

For SCV, it has launched ACE petrol/CNG under BS-VI, with pricing and TCO

similar to BS-IV diesel.

In small Pick-ups, its Intra platform with two products has seen initial success,

with a market share gain of 13pp of the sub-segment. It will continue to extend

its product portfolio on the Intra platform.

In the large Pick-up segment, which is dominated by one brand (Mahindra

Bolero), TTMT is targeting this segment through the Yoddha brand. The latter

has increased its market share by 6pp.

Another reason for loss in market share in LCVs was due to increasing

prominence of the rural market. The management is now expanding its rural

reach via a different format. It is working on micro dealers/sub-dealers for the

SCV and Passenger segment for attaining a lower breakeven point.

In the CV exports business, the management is focused on consolidating its

strong market share and progress in opportunity markets. TTMT would

consolidate its strong position in SAARC and Africa (among the top three brands

in the over 6t segment in 10 markets). It is focusing on improving its positioning

in ASEAN and LatAm. The company has exited Australia, Chile, and Turkey due

to lower contribution margin.

It is shifting to the distributorship model from a National Sales Company model

as it has seen greater success in markets where it has strong distributors.

The management would first focus on the over 6t segment as it offers faster

profitability for the distributor and for the company.

Easy availability of retail finance is important. TTMT would leverage its

distributor partner to improve access to retail finance as well as leverage a

captive NBFC if need be.

TTMT's PV business revival has been driven by super successful product

launches under the 'New Forever' range, supported by smart marketing, channel

transformation, and optimizing demand and supply. The management is

targeting double-digit market share and leadership in SUVs and EVs, high single-

digit EBITDA in three years, FCF breakeven in FY23 and positive FCF thereafter,

and sustainable capex at 5-6% of sales.

It was critical that all five models of TTMT (v/s 8-10 models for key players)

deliver good volumes, which it did, enabling 300bp market share gain in 9MFY21

to 7.8%. This has enabled EBITDA break-even (3.8% EBITDA margin in 3QFY21)

and profits for over 90% of its PV dealers (v/s 40% earlier).

Hornbill will be launched in CY21 and would be creating a new segment. It

would be targeted at hatchback buyers (premium hatches). The entry level SUV

will provide TTMT an opportunity to retain customers within the Tata fold by

CV exports: Plans drawn with a focus on SAARC, Africa, ASEAN, and LatAm



The PV business builds on success by expanding market coverage



23 February 2021

Tata Motors



offering upgrading opportunities in the form of Nexon, Harrier, and Safari. It is

expected to significantly drive volumes and market share for the company.

Post Hornbill, the management’s focus is on refreshing the product pipeline,

offering new technology, and alternate fuel for its existing seven products. It has

ambitious plans for EVs, with two personal EV launches in CY22 at more

accessible price points and offering a higher range.

PV subsidiarization is on track and would be concluded by Jun-Jul'21. The goal of

partnerships in PVs is 'seizing the opportunities of tomorrow and not addressing

the problems of today'.

Consistent improvement in brand equity

by improving the NPS score through

an increase in promoters and reduction in detractors. NPS has improved to

25/28 in FY20/ FY21 from 23 in FY19, thus increasing awareness and

consideration for the brand in the last two years.

Product strategy for a comprehensive and competitive portfolio:

TTMT targets

to achieve 70-75% coverage of the market by CY21-end (from 60% currently),

with a focus on high growth segments like SUVs. It would bring in aspirational

features in accessible variants and strengthen brand association on design,

safety, and new technologies.

Reimagining the front end

to drive enhanced customer experience across the

lifecycle, i.e. sales, aftersales, and digital connect. It has a micro-market specific

sales and network strategy. It would be adding 150-200 outlets in FY21 and

another 250 in FY22. TTMT is in the process of shifting to a new showroom

identity, which would be rolled out to its entire network by FY22 (from 100

dealers at present).

Structurally improve margin

through product mix, cost management,

commercial reduction (through economies of scale and localization), and

increasing non-vehicle sales.

Leveraging existing assets

(550k annual capacity) and ramp-up in the supply

chain to cater to increasing demand. TTMT would focus on inculcating a quality

mind-set across the value chain to deliver positive customer experience across

the product lifecycle.

In the electric PV business, the management is focusing on retaining its market

leadership. It aims to dominate this segment by: a) increasing the number of

models, b) boosting infrastructure, c) optimizing its cost structure, and d)

leveraging synergies within the group for developing the EV ecosystem.

TTMT enjoyed 72% market share in the nascent e-PV industry in 9MFY21 due to

a very good response to Nexon EV. The latter has changed the perception of EVs

among customers as reflected in the sharp shift in its customer profile towards

personal usage (90% of EV industry sales are for personal usage in 9MFY21 v/s

20% in FY20). It is witnessing traction in personal usage for EVs despite no

support under the FAME-2 policy.

Higher fuel prices, increasing upfront cost for ICE PVs, and falling battery prices

may help in bringing forward the inflection point for EVs. The management

expects a substantial increase in EV launches as OEMs focus on CAFÉ norms,

PV business: Five pillars for ‘winning sustainably’



Expects EV penetration of 7-10% in PVs and 15-20% in SCVs by FY25



23 February 2021

Tata Motors



thereby increasing the choice for customers. It expects 7-10% EVs penetration in

PVs in 3-4 years and expects EVs to form 15-20% of TTMT’s PV volumes. It

indicated that the contribution margin for EVs is similar to overall margin.

TTMT expects CVs for last-mile connectivity to see faster electrification. Hence,

it expects SCVs to see 15-20% EV penetration by FY25. On e-buses, it has already

seen good traction, with 215 buses on-road under the FAME-1 scheme (already

covered 7.5m kms) and orders for 500 buses under the FAME-2 scheme. Apart

from e-buses, it is engaging with customers for EVs in SCVs/ICVs.

The management is leveraging synergies with group companies to bolster its EV

ecosystem and support phased localization. While TTMT would focus on e-

vehicles, other group companies would offer several solutions like: a) Tata

Chemicals will provide lithium battery and recycling solutions, b) Tata AutoComp

will supply chargers, c) Tata Power will provide end-to-end charging

infrastructure, d) Tata Capital to provide financing options, and e) TCS to offer

Cloud-based solutions to track and monitor vehicles in real-time.

The CV business aims to achieve: a) double-digit EBITDA margin across cycles, b)

sustainable capex at 3-4% of sales, and c) strong positive FCF.

The PV business would be targeting: a) double-digit market share and leadership

in SUVs and EVs, b) high single-digit EBITDA in three years, c) FCF breakeven in

FY23 and positive FCF thereafter, and e) sustainable capex at 5-6% of sales.

The CV business has seen substantial improvement in the cost structure and

cash conversion, resulting in a 30% reduction in the breakeven point in 9MFY21

through: a) 4-6% reduction in direct material cost through VAVE, commercial

cost reduction, etc., and b) conversion and reduction of fixed cost by 25%.

Capex for EVs would not be substantial as Alpha and Omega architecture are EV

ready. These platforms will utilize existing manufacturing infrastructure as well

as have commonality of parts with ICEs.

The management maintained its plans to attain zero debt (excluding leases) by

FY24 through strong operating cash flows and divestments.

Recovery in JLR volumes in FY21 to be driven by market recovery and ramp-up

in newly launched Evoque and Defender:

JLR volumes have been under

pressure since FY19 due to several headwinds. However, there were early signs

of a recovery in 2HCY19, driven by the new Evoque, ramp-up in I-Pace, and

course correction in China (reversed by the COVID-19 outbreak). With good

support from the governments of China, the EU, and the US, demand recovery is

expected from 2HFY21. JLR should also benefit from the upcoming Defender

launch and PHEV Evoque/Discovery Sport. We expect JLR volumes (including JV)

to decline at 2.6% CAGR over FY20-23E (after a 4.4% decline over FY17-20) as it

de-focuses on less-profitable models. This, coupled with the possibility of an

improvement in mix and reduced variable marketing spends, would drive

further improvement in realizations.

JLR’s

profitability to improve driven by mix, cost-cutting, and operating

leverage:

JLR has several levers, both cyclical and structural, in the form of: a)

targeted GBP1.5-2b in cost cuts (including GBP300m savings in depreciation post

impairment), b) mix improvement (growth in LR and China), c) operating

Sustained improvement in operating performance key to attain zero debt



Valuation and view



23 February 2021

Tata Motors



leverage, d) cost savings from the modular platform (on a full rollout of the

modular strategy), and e) the low-cost Slovakian plant. The convergence of

multiple factors stated above could drive recovery in EBIT margin and leave

scope for positive surprises on profitability. JLR’s targeted transition from the

‘push’ to ‘pull’ strategy for volumes, particularly in China, would be a critical

variable for margin expansion. We estimate JLR’s EBIT margin at

1.7%/4.6%/5.7% in FY21E/FY22E/FY23E (v/s -0.1% in FY20).

India business outlook improving; PV breakeven in sight:

With a steadfast focus on

reducing inventory over the last 3-4 quarters (due to a challenging demand

environment), the management took substantial production cuts, resulting in a

sharp drop in wholesale volumes in 2HFY20. It was further impacted by the COVID-

19 outbreak in 1HFY21. Although TTMT’s India CV business is on a strong footing,

M&HCV volumes may see the slowest recovery in the Auto industry. Its refreshed

product portfolio has helped its PV business recover rapidly, gain market share, and

be on track to achieve FCF breakeven by FY23.

Valuation and view:

Over the last three years, JLR had suffered from adverse

product (growth led by Jaguar), market mix (decline in China contribution), and

increased capex, resulting in negative FCFF over FY18-20. JLR has been focusing

on cutting capex and cost, the benefits of which have now started to reflect.

Despite the impact of the COVID-19 outbreak, we should see the mix

normalizing, with a recovery in LR and China. India business recovery is very

strong for PVs and LCVs, whereas M&HCVs are showing promising signs of a

strong recovery in FY22E. Maintain

Buy

with a TP of INR390/share (Mar’23E

SoTP). We have increased our target EV-to-EBITDA multiple for the India

business to 12x from 10x (in-line with the increase for AL) for capturing mid-

cyclical recovery.

Exhibit 1: TTMT: Sum of the parts based target price

INR b

SoTP Value

Tata Motors - Standalone

JLR (Adj. for R&D capitalization)

JLR - Chery JV EBITDA Share

Tata Motors Finance

Total EV

Less: Net Debt (ex-TMFL)

Tata Sons

Total Equity Value

Fair Value (INR/share) - ordinary share

Upside (%)

Valuation Parameter

EV-to-EBITDA

P/BV

Multiple (x)

2.0

1.0

FY22E

FY23E

60% discount

Fully diluted

635

904

558

659

1,254

1,636

360

233

984

1,493

257

390

-15.5

28.2

Source: Company, MOFSL

23 February 2021

Tata Motors

Exhibit 2: India CV outlook improving with expected growth of 36-38% in FY22E

Source: Company

Exhibit 3: CVs | TTMT continues to lead on customer facing metrics

Source: Company

Exhibit 4: TTMT’S CV business sees substantial cost cuts in 9MFY21

Source: Company

23 February 2021

Tata Motors

Exhibit 5: TTMT’S PV business witnesses consistent improvement in NPS score driven by exciting new products

Source: Company

Exhibit 6: TTMT’S PVs market coverage to improve to 70-75% from 60% with a strong presence in growing segments

Source: Company

23 February 2021

Tata Motors

Exhibit 7: e-PVs | TTMT has established itself as the market leader in the nascent EV market

Source: Company

Exhibit 8: Roadmap to near zero net automotive debt (consolidated)

Source: Company

23 February 2021

Tata Motors

Story in charts

Exhibit 9: JLR volume growth trajectory

JLR volumes (incl JV; '000 units)

15.6

9.5

10.4

5.4

15.4

18.9

Exhibit 10: JLR EBITDA and EBITDA margin trend

EBITDA (GBP m)

EBITDA margin (%)

7.8

14.1

12.1

(10.8)

(7.1)

(23.6)

11.2

8.2

8.7

12.1

13.9

14.7

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E FY23E

Source: Company, MOFSL

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E FY23E

Source: Company, MOFSL

Exhibit 11: JLR’s CFO/capex/FCF trend (GBP m)

CFO

Capex

FCF

Exhibit 12: Standalone business growth path over FY20-22E

Revenues (INR b)

30.6

18.0

5.9

3.4

-36.7

19.5

5.8

Growth (%)

47.5

21.1

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY15

FY16

FY17

FY18

FY19

FY20 FY21E FY22E FY23E

Source: Company, MOFSL

Exhibit 13: Standalone EBITDA and margin trend

EBITDA (INR b)

7.9

4.1

4.9

1.3

8.3

5.2

EBITDA Margins (%)

7.8

9.2

Exhibit 14: Consolidated earnings trajectory

EPS (INR)

43.6

38.4

19.8

22.9

-119.0

-1.1

-12.0 -48.4

15.7

-4.4

-25.3

-7.7

-365.4

-69.6

47.0

Growth (%)

480.5

30.0

20.4

-2.2

(8)

FY15

FY16

FY17

FY18

FY16

FY17

FY18

FY19

FY20 FY21E FY22E FY23E

Source: Company, MOFSL

FY19

FY20 FY21E FY22E FY23E

Source: Company, MOFSL

23 February 2021

Tata Motors

Key operating metrics

Snapshot of Revenue model

000 units

JLR

Jaguar

Growth (%)

% of Total JLR Vols

Land Rover

Growth (%)

% of Total JLR Vols

Total JLR Volumes (incl JV)

Growth (%)

ASP (GBP '000/unit)

Growth (%)

Net JLR Sales (GBP b)

Growth (%)

INDIA

MH&CVs

Growth (%)

LCVs

Growth (%)

Total CVs

Growth (%)

Total PVs

Growth (%)

Total Volumes

Growth (%)

ASP (INR 000/unit)

Net S/A Sales (INR b)

Growth (%)

FY14

37.2

18.4

351

11.6

81.6

430

15.5

6.3

22.8

122

-19.7

299

-30.3

421

-27.5

145

-36.5

567

-30.1

605

343

-23.4

FY15

-3.5

16.1

394

12.4

83.0

475

10.4

3.0

12.8

143

16.5

222

-25.8

365

-13.5

138

-5.3

502

-11.4

723

363

5.9

FY16

102

33.5

18.8

442

12.2

81.2

544

14.6

-5.8

1.9

176

23.6

205

-7.7

381

4.6

152

10.1

533

6.1

804

428

18.0

FY17

179

75.1

29.8

422

-4.5

70.2

601

10.4

4.0

9.2

176

-0.3

209

2.1

385

1.0

157

3.9

542

1.8

817

443

3.4

FY18

176

-1.4

27.8

457

8.3

72.2

634

5.4

3.9

5.9

192

9.2

257

22.7

449

16.6

190

20.8

639

17.8

906

579

30.6

FY19

177

0.7

31.4

388

-15.2

68.6

565

-10.8

0.8

-6.1

225

17.1

295

14.9

520

15.9

211

11.2

731

14.5

946

692

19.5

FY20

144

-18.7

27.5

381

-1.7

72.5

525

-7.1

1.3

-5.1

124

-44.7

216

-26.7

341

-34.5

133

-37.3

473

-35.3

926

438

-36.7

FY21E

-40.6

21.3

316

-17.2

78.7

401

-23.6

21.0

-14.6

-26.0

180

-16.6

272

-20.1

213

60.9

486

2.6

955

464

5.8

FY22E

8.9

20.2

370

17.1

79.8

463

15.4

1.0

17.7

143

55.2

225

25.0

368

35.2

331

55.2

699

44.0

978

684

47.5

FY23E

6.3

19.9

400

8.2

80.1

499

7.8

1.5

9.3

182

27.8

268

19.0

451

22.4

383

15.6

834

19.2

994

829

21.1

23 February 2021

Tata Motors

Financials and valuations

Income Statement (Consolidated)

Y/E March

2016

Total Income

27,30,456

Change (%)

3.8

Expenditure

23,12,693

EBITDA

4,17,763

% of Net Sales

15.3

Depreciation

1,67,108

EBIT

2,50,655

Product Dev. Exp.

34,688

Interest

48,891

Other Income

8,854

EO Exp/(Inc)

18,504

Forex Gain/ (Loss)

-16,169

PBT

1,41,258

Tax

30,251

Effective Rate (%)

21.4

Reported PAT

1,11,007

Change (%)

-21.0

% of Net Sales

4.1

Minority Interest

-989

Share of profit of associate

5,775

Net Profit

1,15,793

Adj. PAT

1,30,334

Change (%)

-7.2

Balance Sheet (Cons.)

Y/E March

Share Capital

Reserves

Net Worth

Loans

Deferred Tax

Capital Employed

Gross Fixed Assets

Less: Depreciation

Net Fixed Assets

Capital WIP

Goodwill

Investments

Curr.Assets

Inventory

Sundry Debtors

Cash & Bank Bal.

Loans & Advances

Current Liab. & Prov.

Sundry Creditors

Other Liabilities

Net Current Assets

Appl. of Funds

E: MOFSL Estimates

2017

26,96,925

-1.2

23,27,802

3,69,124

13.7

1,79,050

1,90,074

34,136

42,380

7,545

-11,146

-39,101

93,148

32,512

34.9

60,636

-45.4

2.2

-1,022

14,930

74,544

67,288

-48.4

2018

29,15,505

8.1

25,77,462

3,38,043

11.6

2,15,536

1,22,507

35,319

46,818

39,576

-19,751

11,853

1,11,550

43,419

38.9

68,131

12.4

2.3

-1,025

22,783

89,889

77,826

15.7

2019

30,19,384

3.6

27,21,436

2,97,948

9.9

2,35,906

62,042

42,246

57,586

29,653

2,96,516

-9,059

-3,13,712

-24,375

7.8

-2,89,337

-524.7

-9.6

-1,020

2,095

-2,88,262

-14,785

-119.0

2020

26,10,680

-13.5

23,71,537

2,39,143

9.2

2,14,254

24,889

41,885

72,433

29,732

28,714

-17,387

-1,05,800

3,953

-3.7

-1,09,752

-62.1

-4.2

-956

-10,000

-1,20,709

-90,921

515.0

2021E

24,69,281

-5.4

21,55,606

3,13,675

12.7

2,36,127

77,549

42,406

79,791

26,825

4,145

26,828

4,860

31,652

651.3

-26,792

-75.6

-1.1

-778

-5,266

-32,835

-29,411

-67.7

2022E

30,84,100

24.9

26,52,249

4,31,851

14.0

2,53,259

1,78,592

45,138

75,593

25,200

9,951

93,012

13,419

14.4

79,593

-397.1

2.6

-274

-1,249

78,070

-365.4

(INR m)

2023E

35,20,048

14.1

30,03,809

5,16,240

14.7

2,77,311

2,38,928

47,587

68,192

21,571

10,150

1,54,871

40,828

26.4

1,14,042

43.3

3.2

-366

1,122

1,14,799

47.0

(INR m)

2023E

7,659

8,05,331

8,12,990

10,06,782

-35,160

17,94,163

34,66,811

21,34,809

13,32,002

2,50,000

7,771

45,952

18,46,133

4,53,267

2,12,167

6,25,010

5,32,741

16,87,694

8,48,669

6,46,146

1,58,439

17,94,163

2016

6,792

7,82,732

7,89,524

6,19,612

44,748

14,58,212

19,76,068

9,11,348

10,64,720

2,59,189

7,598

2,37,670

11,02,234

3,26,557

1,35,709

3,04,604

2,54,033

12,13,200

6,15,618

4,60,226

-1,10,965

14,58,212

2017

6,792

5,73,827

5,80,619

7,44,891

11,740

13,41,781

16,28,389

6,75,681

9,52,708

3,36,988

6,733

2,03,379

12,37,735

3,50,853

1,40,756

3,60,779

2,91,474

13,95,762

6,25,326

6,22,314

-1,58,027

13,41,782

2018

6,792

9,47,487

9,54,279

7,79,944

19,671

17,59,144

21,56,778

9,17,952

12,38,826

4,00,335

1,165

2,08,128

14,23,465

4,21,377

1,98,933

3,46,139

4,45,929

15,12,775

7,69,398

5,38,766

-89,309

17,59,144

2019

6,792

5,95,003

6,01,795

9,11,239

-36,601

14,81,664

22,58,724

11,53,858

11,04,866

3,18,838

7,478

1,57,707

14,31,544

3,90,137

1,89,962

3,26,488

5,12,867

15,38,770

7,16,907

6,01,347

-1,07,226

14,81,664

2020

7,195

6,23,590

6,30,785

9,96,782

-35,160

16,00,542

26,01,413

13,68,113

12,33,301

3,56,223

7,771

1,63,085

14,06,255

3,74,569

1,11,727

3,37,270

5,69,741

15,66,092

6,63,982

6,51,452

-1,59,837

16,00,542

2021E

7,659

6,16,317

6,23,976

9,96,782

-35,160

15,94,510

29,54,883

16,04,239

13,50,644

2,50,000

7,771

46,079

12,38,927

3,04,432

1,35,303

3,16,502

4,69,741

12,98,910

6,22,394

5,07,387

-59,983

15,94,510

2022E

7,659

6,94,387

7,02,046

9,96,782

-35,160

16,72,854

31,97,421

18,57,498

13,39,923

2,50,000

7,771

44,830

15,68,155

3,80,231

1,68,992

4,98,243

5,02,741

15,37,825

7,77,362

5,91,471

30,330

16,72,854

23 February 2021

Tata Motors

Financials and valuations

Ratios (Con.)

Y/E March

Basic (INR)

EPS

EPS Fully Diluted

EPS Growth (%)

Cash EPS

Book Value (Rs/Share)

DPS

Payout (Incl. Div. Tax) %

Valuation (x)

Consolidated P/E

EV/EBITDA

EV/Sales

Price to Book Value

Dividend Yield (%)

Profitability Ratios (%)

RoE

RoCE

RoIC

Turnover Ratios

Debtors (Days)

Inventory (Days)

Creditors (Days)

Asset Turnover (x)

Leverage Ratio

Debt/Equity (x)

Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Int/Div. Received

Depreciation

Direct Taxes Paid

(Inc)/Dec in WC

Other Items

CF from Op Activity

Extra-ordinary Items

CF after EO Items

(Inc)/Dec in FA+CWIP

Free Cash Flow

(Pur)/Sale of Invest.

CF from Inv Activity

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

Dividends Paid

CF from Fin Activity

Inc/(Dec) in Cash

Add: Beginning Bal.

Closing Balance

E: MOFSL Estimates

2016

38.4

-12.0

87.6

232.5

0.0

7.9

2.7

0.4

1.3

0.0

19.3

15.1

34.5

1.9

0.8

2017

19.8

-48.4

72.5

171.0

0.0

15.3

3.3

0.4

1.8

0.0

9.8

9.2

22.6

2.0

1.3

2018

22.9

15.7

86.4

281.0

0.0

13.3

3.7

0.4

1.1

0.0

10.1

6.4

12.0

1.7

0.8

2019

-4.4

-119.0

65.1

177.2

0.0

-69.9

4.9

0.5

1.7

0.0

-1.9

5.2

7.7

2.0

1.5

2020

-25.3

480.5

34.3

175.3

0.0

-12.0

6.7

0.6

1.7

0.0

-14.8

3.7

3.6

1.6

2021E

-7.7

-69.6

54.0

162.9

0.0

-39.6

5.7

0.7

1.9

0.0

-4.7

-36.0

-49.5

1.5

1.6

2022E

20.4

-365.4

86.5

183.3

0.0

14.9

3.7

0.5

1.7

0.0

11.8

10.7

16.4

1.8

1.4

2023E

30.0

47.0

102.4

212.3

1.0

3.4

10.1

2.9

0.4

1.4

0.3

15.2

11.1

20.1

2.0

1.2

2016

1,10,238

8,258

1,70,142

-19,939

25,515

96,855

3,91,069

8,857

3,99,925

-3,26,232

73,693

-68,134

-3,94,366

74,332

-47,483

-57,039

-1,739

-31,930

-26,371

2,11,283

1,84,913

2017

75,566

36,653

1,79,050

-18,951

32,542

8,954

3,13,814

-11,822

3,01,992

-3,04,135

-2,143

-76,664

-3,80,799

1,16,583

-53,363

-1,212

62,053

-16,754

1,84,913

1,68,159

2018

90,914

39,542

2,15,536

-30,212

-64,337

23,333

2,74,776

-36,202

2,38,574

-3,50,486

-1,11,912

86,031

-2,64,456

75,183

-54,106

-960

20,117

-5,764

1,68,159

1,62,395

2019

-2,87,242

-4,413

2,35,906

-26,594

-72,123

64,994

-89,472

2,78,379

1,88,908

-3,52,363

-1,63,455

1,57,691

-1,94,672

1,59,302

-70,051

-947

88,304

82,540

1,62,395

2,44,934

2020

-1,19,752

-11,913

2,14,254

-17,489

50,636

1,25,105

2,40,841

25,488

2,66,329

-2,95,306

-28,976

-46,397

-3,41,702

38,888

81,318

-75,184

-568

44,453

-30,920

2,44,934

2,14,014

2021E

-32,835

26,825

2,36,127

-31,652

-1,20,621

778

78,620

-4,145

74,475

-2,47,247

-1,72,772

1,17,005

-1,30,241

26,026

-79,791

-53,764

-1,09,531

2,14,014

1,04,484

2022E

78,070

25,200

2,53,259

-13,419

91,427

274

4,34,810

-2,42,538

1,92,272

1,249

-2,41,289

-75,593

1,17,928

1,04,484

2,22,411

2023E

1,14,799

21,571

2,77,311

-40,828

-1,341

366

3,71,878

-2,69,390

1,02,488

-1,122

-2,70,513

10,000

-68,192

-3,855

-62,047

39,318

2,22,411

2,61,730

23 February 2021

Tata Motors

Explanation of Investment Rating

Investment Rating

Expected return (over 12-month)

BUY

>=15%

SELL

< - 10%

NEUTRAL

< - 10 % to 15%

UNDER REVIEW

Rating may undergo a change

NOT RATED

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within

following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

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Specific Disclosures

1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.

2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company

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9 MOFSL has not received any compensation or other benefits from third party in connection with the research report

10 MOFSL has not engaged in market making activity for the subject company

23 February 2021

Tata Motors

********************************************************************************************************************************

The associates of MOFSL may have:

- financial interest in the subject company

- actual/beneficial ownership of 1% or more securities in the subject company

- received compensation/other benefits from the subject company in the past 12 months

- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the

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The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report

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clients which are not considered in above disclosures.

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23 February 2021