Motilal Oswal Financial Services

15 June 2021

Annual Report

Update

| Sector:

Automobiles

Tata Motors

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15,869

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CMP: INR353

TP: INR405(+15%)

‘Reimagine’ to drive JLR transformation

Project Charge+ delivers margins, drives debt reduction

Buy

Jaguar Land Rover (JLR)’s FY21 Annual Report focuses on the company’s next phase of

growth. The company has outlined its strategy for the transformation to electric

mobility and to focus more on profitability over volumes. Here are the key points from

the Annual Report:



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 (%)

TTMT IN

3,598

1255 / 17.1



361 / 92

5/83/192

16851



53.6

Financials & Valuations (INR b)

Y/E March

2021

2022E

Net Sales

2,498

3,161

EBITDA

357.8

435.8

Adj. PAT

2.2

89.5

Adj. EPS (INR)

0.6

23.4

EPS Gr. (%)

-102.2 4,048.1

BV/Sh. (INR)

144.3

167.6

Ratios

Net D/E (x)

2.1

1.8

RoE (%)

0.4

15.0

RoCE (%)

11.3

10.6

Payout (%)

0.0

Valuations

P/E (x)

625.7

15.1

P/BV (x)

2.4

2.1

EV/EBITDA (x)

5.0

4.5

Div. Yield (%)

0.0

FCF Yield (%)

7.3

-18.9

2023E

3,614

522.5

128.0

33.4

43.0

200.1

1.5

18.2

11.3

3.0



10.5

1.8

3.5

0.3

11.9



As per the message from CEO Thierry Bolloré, the ‘Reimagine’ strategy

would transform the business and its distinct brands. It would create a

knowledge-sharing collaborative ecosystem with the very best partners in

the global industry for a massive leap in clean energy, software, and

digitalization. Its goal is to deliver double-digit EBIT margins and be among

the world’s most profitable luxury manufacturers.

Both the Jaguar and Land Rover brands would undergo transformation by

electrification – six new all-electric Land Rover models would be introduced

in the next five years and Jaguar would be completely reimagined as a

purely electric brand from 2025. JLR aims to have full-BEV powertrains

accounting for around 60% of the total JLR sales by 2030 and 100% of

volumes by 2036.

By the end of the decade, it would migrate from six different architectures

to just three central to its new architecture strategy, in line with the

accelerated shift to electrification.

The ‘Reimagine’ and ‘Refocus’ projects would together deliver revenue of

over GBP30b and double-digit EBIT margins by FY26. These would generate

strong positive free cash flow from FY23 after an around GBP2.5b

investment spend (annually) and a reduction in net debt, returning to a net

cash position in FY25.

The Reimagine strategy would drive the journey toward net zero carbon

emissions by 2039. Currently, 12 models have electrified options, including

eight plug-in hybrids, 11 mild-hybrids, and one BEV.

JLR is seeing greater collaboration and synergies within the Tata Group in

areas of clean energy, connected services, data, and software development.

It aims to create next-generation-based electrical vehicle architecture – EVA

continuum – developed along with Tata Consultancy Services.

FY21 saw outflow of GBP24m toward working capital changes, largely due to

outflow of GBP433m on the release of provisions for residual value risk and

emissions, primarily in the US.

Both the JLR and India businesses are on the path to cyclical recovery. This,

coupled with restructuring initiatives, would drive further debt reduction.

The stock trades at 10.5x FY23 consol. EPS and 3.5x EV/EBITDA. Maintain

Buy, with TP of INR405 (Mar’23 SOTP).

Jinesh Gandhi – Research Analyst

(Jinesh@MotilalOswal.com)

Research Analyst: Vipul Agrawal

(Vipul.Agrawal@MotilalOswal.com) /

Aniket Desai

(Aniket.Desai@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

“Thierry

has very quickly moved

into his role and worked closely

with the team and the Board to

develop the future strategy.

Jaguar Land Rover under his

leadership, has now unveiled its

new Reimagine strategy to make

the company a world leader in

electrified luxury vehicles,

sustainability, manufacturing

efficiency and new automotive

technologies to deliver a strong

market performance which shall

create long-term shareholder

value.”

Message from the new CEO – Thierry Bolloré



Mr Natarajan Chandrasekaran,

Chairman, JLR.



“Ultimately, our will is to

become the creator of the

world’s most desirable luxury

vehicles and products, for the

most discerning of customers.

Our plan is not to catch up;

our plan is to lead.” Thierry

Bolloré, CEO, JLR



JLR as an organization is turning more agile by playing on its human-centric

strengths. It has many hurdles to overcome on this course, including the current

global shortage of semiconductors. However, with the Reimagine strategy, it has

a clear view of the road ahead – a future of modern luxury by design.

Reimagine would allow the company to confidently transform the business and

its distinct brands, and satisfy and reward its customers and investors. JLR would

simplify its architectural strategy and reorganize its manufacturing footprint,

placing quality and sustainability at the core.

The company would create a knowledge-sharing collaborative ecosystem with

the very best partners in the global industry for a massive leap in clean energy,

software, and digitalization.

JLR would focus on value creation through a profit-over-volume approach. Its

goal is to deliver double-digit EBIT margins and be one of the world’s most

profitable luxury manufacturers.

To help deliver this vision, four new roles were created on the board of directors

in FY21 – Nigel Blenkinsop joined as Executive Director of Company Quality &

Customer Satisfaction; Dave Owen for the new Supply Chain function; Nick

Collins for Vehicle Programs; and Prof. Gerry McGovern as Chief Creative

Officer. Furthermore, Thierry Bolloré (CEO) and Frank Ludwig (Chief

Transformation Officer) would lead the total transformation of its culture under

Refocus in terms of leadership, organization, and structure.

Transformation of both brands



Both the Jaguar and Land Rover brands would undergo transformation by

electrification – six new all-electric Land Rover models would be introduced in

the next five years and Jaguar would be completely reimagined as a purely

electric brand from 2025.

2024 would mark the entry of the first electric Land Rover into the market, with

over six all-electric LR variants scheduled to be introduced over the next five

years. Jaguar would be positioned as a pure electric luxury brand from 2025.

The company aims to position Jaguar as an aspirational and technologically

engaging brand, thus carving a niche in the market. All of the new Jaguars due to

be launched from 2025 would be built on a separate architecture. The company

is in consultation with potential partners for the same.

JLR aims to have full-BEV powertrains accounting for around 60% of the total JLR

sales by 2030 and 100% of volumes by 2036.

Modular platform to drive consolidation from six to three platforms



The end of the decade would mark JLR’s migration from six different

architectures to just three central to its new architecture strategy. This is in line

with the accelerated shift towards electrification.

Land Rover would use the forthcoming

Flexible Modular Longitudinal

Architecture (MLA-Flex).

This would deliver electrified Internal Combustion

Engines (e.g., plug-in hybrids and mild-hybrids) initially, but allow for full

battery-electric capability, which is in preparation for the future product line-up.

Additionally, JLR would implement the new

Electric Modular Architecture

(EMA).

This was created with the aim to drive simplicity via native-BEV and

15 June 2021

Tata Motors

agnostic to battery chemistry to keep up with future technology. The

architecture would also accommodate small capacity, high-performance

electrified ICE – true electric-first flexibility, enabling the company to offer BEV,

PHEV, and MHEV vehicles with exceptional range and performance.

Refocus program to drive Reimagine strategy



The Reimagine strategy, driven by the Refocus program, would help achieve the

full potential of the JLR brands via a massive leap in technology, placing quality

and sustainability at the core. This would in turn satisfy customers and investors,

thus transforming the business and its brands.

Each of the six pillars (of the Refocus program – see Exhibit 1) would be led by

JLR’s board of directors, supported by experienced senior leaders and 35

workstreams (established earlier).

Digital transformation through InDigital delivery would fuel the Refocus

program. The team would include experts in data analytics and intelligent

automation with experience working on the Charge+ program. The primary

objective would be to drive efficiency through developing digital capacity.

Refocus would deliver profitability; it is estimated to achieve GBP4b of value

within five years (GBP1b in FY22) and 3% incremental EBIT margins by FY26 on

its journey to attaining double-digit margins.

The ‘Reimagine’ and ‘Refocus’ projects would together deliver revenue of over

GBP30b and double-digit EBIT margins by FY26. These would generate strong

positive free cash flow from FY23 after an around GBP2.5b investment spend

(annually) and a reduction in net debt, returning to a net cash position in FY25.

Manufacturing ‘Refocus’ toward more simplified and agile operations



Through Reimagine, JLR would rationalize sourcing and accelerate investments

in local circular economy supply chains – by consolidating the number of

platforms and models produced per plant.

Solihull

would be the manufacturing base for the MLA-Flex architecture and the

new Jaguar portfolio.

Halewood

would host the new EMA architecture and continue to enhance the

strategic benefits of its plants in Slovakia and China.

Castle Bromwich

would continue to manufacture JLR’s existing models to the

end of their life. It would then be repurposed and derive benefit from the

company’s plans to realize efficiencies in the Midlands property portfolio.

JLR’s global engineering center at Gaydon would be the consolidated hub of all

management functions, thus enabling frictionless cooperation and agile

decision-making. This would substantially reduce and rationalize other non-

manufacturing infrastructure.

These efforts would ultimately improve the utilization and efficiency of all of the

operations.

Tailpipe emissions down 15% in FY21; targets net zero carbon by 2039



The company reduced tailpipe CO2 emissions in FY21 by 15% over FY20 by

offering hybrid technology. Currently, 12 models have electrified options,

including eight plug-in hybrids, 11 mild-hybrids, and one BEV.

15 June 2021

Tata Motors



The Reimagine strategy would fuel the path to net zero carbon emissions by

2039. Both brands would undergo transformation by electrification – six new all-

electric Land Rover models would be introduced in the next five years and

Jaguar would be completely reimagined as a purely electric brand from 2025.

These actions would contribute to the targets of achieving zero tailpipe

emissions by 2036 and being a net zero carbon business by 2039, even in terms

of the supply chain, products, and global operations.

Other takeaways



The present global supply shortage of semi-conductors would impact production

and sales volumes. These are expected to be lower than initially planned in the

1HFY22. However, supply constraints would ease in 2HFY22 as new capacity

comes online. As a result, most of the lost production would be recovered once

the supply of semi-conductors improves.

The Defined Benefit Pension plan is underfunded by ~GBP387m (v/s overfunding

of GBP380m in FY20) as Defined Benefit Obligation has increased by GBP644m

primarily due to changes in the financial assumptions (leading to actuarial loss of

GBP869m on a 30bp reduction in the discount rate and a 50bp increase in

inflation). On the other hand, the present value of scheme assets has marginally

declined by GBP123m to GBP8.05b.

JLR is seeing greater collaboration and synergies within the Tata Group in areas

of clean energy, connected services, data, and software development. It has

frictionless access to some of the world’s leading players in technology,

software, and clean energy. It aims to create next-generation-based electrical

vehicle architecture – EVA continuum – developed along with Tata Consultancy

Services.

Financial highlights: Project Charge+ delivers margins and debt reduction



Wholesale volumes (incl. Chery JLR) declined ~21% YoY to 412.9k. Net

realizations grew 17.5% YoY to GBP56.8k on a favorable sales mix. Net sales

declined 14% to GBP19.7b.

EBITDA margins improved 4pp YoY to 12.8%. Lower wholesales were offset by

(a) a more favorable sales mix, (b) lower incentive spending (including the

release of residual value provisions, primarily in the US), (c) lower provisions for

emissions costs (largely in the US), (d) further cost efficiencies related to

Charge+, and (e) realized foreign exchange gains net of hedges. JLR’s EBIT

margin stood at 2.6% (v/s -0.1% in FY20).

FCF in FY21 was positive GBP185m (v/s negative GBP759m in FY20), after

investments of GBP2.3b. Net debt declined to GBP1.9b (v/s GBP2.2b in FY20).

Working capital outflows (including non-cash accruals) were GBP24m during the

year – this reflects improvement in inventory by GBP459m and in payables by

GBP11m and the deterioration of receivables by GBP61m. The remaining

outflow of GBP433m is primarily toward the release of provisions for residual

value risk and emissions (largely in the US; GBP189m), with the balance toward

movement in other assets and liabilities, including buyback obligations.

15 June 2021

Tata Motors

Valuation and view



Over the last three years, JLR had suffered from an adverse product mix (growth

led by Jaguar), an adverse market mix (decline in China contribution), and

increased capex, resulting in negative FCFF over FY18–20. JLR has been focused

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

Despite the impact of COVID-19, we should see the mix normalizing – with

recovery in LR and China.

JLR has several levers, both cyclical and structural, in the form of (a) cost-cutting

initiatives on both variable and fixed costs, (b) mix improvement (growth in LR

and China), (c) operating leverage, and (d) cost savings on the modular platform

(on the full rollout of the modular strategy). The convergence of the multiple

factors stated above could drive recovery in EBIT margins and leave scope for

positive surprises on profitability.

India business recovery has been severely impacted by the second COVID wave.

Although TTMT’s India CV business is on a strong footing, the company may see

stagnation in M&HCV volume recovery for now. On the other hand, TTMT’s

refreshed product portfolio has aided rapid recovery in the PV business and

market share gains; it is back on track to achieve FCF breakeven by FY23.

The stock trades at 10.5x FY23 consol. EPS and 3.5x EV/EBITDA. Maintain Buy,

with TP of INR405 (Mar’23 SOTP).

Exhibit 1: TATA MOTORS: Sum-of-the-parts valuation

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/Sh) - Ord Sh

Upside (%)

Valuation Parameter

EV/EBITDA

P/BV

Multiple (x)

1.0

FY22E

FY23E

40% discount

Fully Diluted

638

962

602

710

1,303

1,746

539

364

168

932

1,550

243

405

-31.0

14.8

Source: MOFSL

15 June 2021

Tata Motors

Exhibit 2: Pillars of Refocus

Exhibit 3: JLR EV mix

Exhibit 4: Debt maturity profile

15 June 2021

Tata Motors

Exhibit 5: Executive bonus parameters in sync with strategy change

FY20

FY21

Volume

Quality

Cost

Cash flow

Variable Profit

PBT

Source: Company, MOFSL

Exhibit 6: Revenue mix as per region (% of sales)

FY16

FY17

FY18

FY19

FY20

FY21

Exhibit 7: Favorable product mix (% of volumes)

RoW

Europe

Jaguar

China

FY16

FY17

FY18

FY19

FY20

FY21

Source:Company,MOFSL

Source: Company,MOFSL

Exhibit 8: Trend in the number of employees

Number of employees

44,101

41,787

39,787

37,543

Exhibit 9: Trend in R&D capitalization (% of total R&D)

Trend in R&D Capitalisation(% of total R&D)

39,693

37,005

Source: Company, MOFSL

Exhibit 10: Trend in other expenses

Other exp.(% of sales)

Exhibit 11: Cost reduction across other expenses (% of sales)

Mfg Exp

21.0

3.6

2.6

3.8

10.9

FY16

Source: Company, MOFSL

Freight

Warranty

22.7

3.7

2.7

4.0

12.3

Mktg

23.0

3.5

4.2

2.7

12.6

Total Other Exp (gross)

22.8

3.2

4.9

2.7

12.0

FY20

22.1

3.6

3.4

3.8

11.3

FY17

18.2

2.0

3.6

2.5

10.1

FY21

FY18

FY19

Source: Company, MOFSL

15 June 2021

Tata Motors

Exhibit 12: Trend in working capital days

Trend in working capital days

Exhibit 13: Trend in capex and R&D

Capex+R&D(GBP m)

% of sales

-23

-29

-21

-33

-31

-38

FY16

Source: Company, MOFSL

FY17

FY18

FY19

FY20

FY21

Source: Company, MOFSL

Exhibit 14: Trend in net debt and absolute interest

Net Debt (GBP m)

Interest (GBP m)

157

240

Exhibit 15: Trend in JLR’s CFO/FCF trend (GBP m)

CFO

FY16

FY17

FY18

FY19

FY20

FY21

FY16

FY17

FY18

FY19

FY20

FY21

Source:Company MOFSL

15 June 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 (%)

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

FY21

-37.3

21.9

322

-15.4

78.1

413

-21.4

17.5

-14.2

-27.6

173

-20.2

263

-22.9

223

67.8

485

2.5

966

469

7.0

FY22E

9.6

20.0

395

22.6

80.0

494

19.8

-1.0

19.3

141

56.9

211

22.2

352

34.1

339

52.4

692

42.5

1,019

705

50.3

FY23E

105

6.3

19.8

428

8.2

80.2

533

7.8

1.5

9.3

182

28.6

252

19.3

434

23.0

392

15.7

826

19.4

1,041

859

22.0

15 June 2021

Tata Motors

Financials and valuations

Income Statement (Consolidated)

Y/E March

Total Income

Change (%)

Expenditure

EBITDA

% of Net Sales

Depreciation

EBIT

Product Dev. Exp.

Interest

Other Income

EO Exp/(Inc)

Forex Gain/ (Loss)

PBT

Tax

Effective Rate (%)

Reported PAT

Change (%)

% of Net Sales

Minority Interest

Share of profit of associate

Net Profit

Adj. PAT

Change (%)

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

2016

27,30,456

3.8

23,12,693

4,17,763

15.3

1,67,108

2,50,655

34,688

48,891

8,854

18,504

-16,169

1,41,258

30,251

21.4

1,11,007

-21.0

4.1

-989

5,775

1,15,793

1,30,334

-7.2

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

2021

24,97,948

-4.3

21,40,128

3,57,819

14.3

2,35,467

1,22,352

52,266

80,972

26,432

1,37,610

17,322

-1,04,743

25,419

-24.3

-1,30,161

18.6

-5.2

-563

-3,790

-1,34,514

2,158

-102.4

2022E

31,60,539

26.5

27,24,786

4,35,754

13.8

2,44,980

1,90,774

45,404

75,173

25,200

11,022

1,06,419

15,815

14.9

90,603

-169.6

2.9

-274

-795

89,535

4,048.6

(INR m)

2023E

36,13,528

14.3

30,91,012

5,22,516

14.5

2,65,203

2,57,313

47,941

72,321

21,571

10,220

1,68,843

42,198

25.0

1,26,645

39.8

3.5

-366

1,764

1,28,044

43.0

(INR m)

2023E

7,659

7,58,533

7,66,192

11,57,756

-29,645

19,10,677

34,61,742

21,13,763

13,47,980

2,50,000

8,037

48,525

19,88,649

4,65,304

2,17,802

6,45,008

6,31,849

17,32,514

8,71,207

6,63,305

2,56,135

19,10,677

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

2021

7,658

5,44,809

5,52,467

11,47,756

-29,645

16,86,313

29,82,619

16,03,580

13,79,039

2,09,639

8,037

2,46,203

15,43,136

3,60,886

1,26,791

4,67,925

5,68,849

16,99,741

6,81,798

7,53,395

-1,56,605

16,86,313

2022E

7,659

6,34,344

6,42,003

11,47,756

-29,645

17,76,123

31,87,948

18,48,560

13,39,388

2,50,000

8,037

46,761

16,58,761

3,89,656

1,73,180

4,70,390

6,01,849

15,26,824

7,96,629

5,57,015

1,31,937

17,76,123

15 June 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

9.2

3.1

0.5

1.5

0.0

19.3

15.1

34.5

1.9

0.8

2017

19.8

-48.4

72.5

171.0

0.0

17.8

3.7

0.5

2.1

0.0

9.8

9.2

22.6

2.0

1.3

2018

22.9

15.7

86.4

281.0

0.0

15.4

4.2

0.5

1.3

0.0

10.1

6.4

12.0

1.7

0.8

2019

-4.4

-119.0

65.1

177.2

0.0

-81.0

5.5

0.5

2.0

0.0

-1.9

5.2

7.7

2.0

1.5

2020

-25.3

480.5

34.3

175.3

0.0

-14.0

7.4

0.7

2.0

0.0

-14.8

3.7

3.6

1.6

2021

0.6

-102.2

62.1

144.3

0.0

625.7

5.0

0.7

2.4

0.0

0.4

11.3

20.2

100

1.5

2.1

2022E

23.4

4,048.1

87.4

167.6

0.0

15.1

4.5

0.6

2.1

0.0

15.0

10.6

18.3

1.8

2023E

33.4

43.0

102.7

200.1

1.0

3.0

10.5

3.5

0.5

1.8

0.3

18.2

11.3

19.5

1.9

1.5

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

-59,542

-3,85,774

74,332

-47,483

-57,039

-1,739

-31,930

-17,779

2,11,283

1,93,505

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

-91,579

-3,95,714

1,16,583

-53,363

-1,212

62,053

-31,669

1,71,536

1,39,867

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

99,095

-2,51,391

75,183

-54,106

-960

20,117

7,300

1,39,867

1,47,167

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

1,43,582

-2,08,781

1,59,302

-70,051

-947

88,304

68,431

1,47,168

2,15,598

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

-35,840

-3,31,146

38,888

70,761

-75,184

-568

33,896

-30,920

2,15,598

1,84,678

2021

-1,33,951

-5,109

2,35,467

-21,046

-926

2,34,023

3,08,459

-18,454

2,90,005

-1,98,548

91,457

-58,177

-2,56,725

26,025

1,54,549

-81,229

-303

99,042

1,32,322

1,84,678

3,17,000

2022E

89,535

25,200

2,44,980

-15,815

-2,86,077

274

58,097

-50,099

7,998

-2,45,690

-2,37,692

1,99,442

-46,248

-75,173

-75,172

-1,13,421

3,17,000

2,03,579

2023E

1,28,044

21,571

2,65,203

-42,198

50,420

366

4,23,406

-2,73,795

1,49,611

-1,764

-2,75,559

10,000

-72,321

-3,855

-66,176

81,671

2,03,579

2,85,250

15 June 2021

Tata Motors

NOTES

15 June 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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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

15 June 2021

Tata Motors

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

The associates of MOFSL may have:

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- 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.

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15 June 2021