9 November 2017
Q2FY18 Results Update | Sector: Automobiles
Tata Motors
Buy
BSE SENSEX
33,251
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
10,309
TTMT IN
Above est; Strong performance at both JLR & India business
3396.6
Consol
EBITDA increased 20% YoY (+80% QoQ) to INR89.4b (est INR72.5b),
1,495.5 / 23.0
translating into EBITDA margin expansion of 90bp YoY (+4100bp QoQ) at
553/358
12.6% (est 10.5%). Adj PAT increased 65% YoY to INR24.4b (est INR12.1b).
-1/-8/-40
JLR – Lower fx hedge loss, lower other expenses & Op. leverage drives
3557
EBITDA:
Net sales at GBP6.3b (in-line) grew 11.5% YoY (+12.9% QoQ) led
63.6
CMP: INR440 TP: INR575(+31%)
Financials & Valuations (INR b)
2018E
2019E
Y/E Mar
Net Sales
2,959
3,622
EBITDA
371.8
577.3
PAT
83.6
220.0
EPS (INR)
24.6
64.8
Gr. (%)
24.2
163.2
BV/Sh (INR)
195.6
261.6
RoE (%)
13.4
28.3
RoCE (%)
7.0
16.6
P/E (x)
17.9
6.8
P/BV (x)
2.3
1.7
2020E
3,923
610.1
228.1
67.2
3.7
330.0
22.7
14.3
6.6
1.3
Estimate change
TP change
Rating change
by volume growth of 6.2% YoY and realization growth of 5% YoY. EBITDA
margins expanded 90bp YoY (+390bp QoQ) to 11.8% (v/s est 10.7%) driven
by lower fx hedge loss, lower other expenses and operating leverage.
Further higher share of China JV PAT, fx gains and lower depreciation
boosted adj. PAT growth to 26% to GBP308m (est GBP169m).
S/A – Better mix and cost reduction propels EBITDA margins:
Revenues
grew 35% YoY (+53% QoQ) to INR138.9b (est INR130.9b) led by volume
and realisation growth of 14% YoY and 18% respectively. EBITDA margin
came in at 7% (est. 4.5%), expanded 370bp YoY (+700bp QoQ), driven by
better mix, cost reduction initiatives and op. leverage. As a result, net loss
was lower at INR2.9b (est INR4.7b), as against loss of INR5.8b in 2QFY17.
Earnings call highlights:
a) Maintains 10% retail growth guidance for FY18
(implied residual growth of 17%), despite weak outlook in key developed
markets. b) EBIT margin target of 8-10% in medium term factors in for
lower margins of EVs & higher variable marketing spend. c) Though
competitive intensity remains high, especially in sedan segment, JLR is
averse to chasing volume at any price. d) Fx hedge losses to reduce from
4QFY18 onwards, as reflected in sharp reduction in unrealized current Fx
hedge losses to GBP793m as of Sep-17 (v/s GBP1.1b as of Jun-17). e) India
business PAT breakeven in FY18, led by cost reduction & volume growth.
Valuation & view:
We have upgraded consol EPS by 23%/6% for FY18/19,
as we build in margin expansion at JLR and S/A business. The stock trades
at 6.8x FY19E EPS & 2.9x EV/EBITDA. Maintain
Buy
with TP of INR575.
FY18
FY17
FY18E
1Q
2Q
3QE
4QE
2QE Var (%)
138,476 153,210 163,000 200,035 600,806 654,722 153,210
0.0
47,483 48,137 48,377 49,451 45,515
48,474 47,768
0.8
7.9
11.8
12.4
16.1
12.1
12.5
10.7
110bp
109,692 153,321 148,268 169,407 542,322 580,688 153,321
0.0
829,080 905,798 869,566 917,244 818,038 885,394 853,952
6.1
0.0
7.0
6.3
7.8
3.8
5.8
4.5
250bp
-4,671 -2,953 -3,526
426 -21,341 -10,723 -4,714
584,934 706,907 710,803 956,107 2,696,925 2,958,750 688,159
2.7
-10.0
11.3
11.2
23.8
-1.2
9.7
4.42
49,648 89,383 92,053 119,972 295,887 351,056 72,494
23.3
8.5
12.6
13.0
12.5
11.0
11.9
10.5
210bp
-5,145 30,099 28,603 58,339 82,002 111,896 12,994
131.6
-42,515
-715
0
0 27,955
0
0
37,370 30,814 28,603 58,339 54,047 111,896 12,994
137.1
32.3
35.4
32.0
25.5
60.2
42.0
32.0
3,045 24,366 24,750 48,996 46,581
87,167 12,092
101.5
(89.5)
64.8 (1,205)
13.3
-64.3
87.1
-46.4
Quarterly performance (INR m)
Y/E March
(Consolidated)
JLR vols. (incl JV)
JLR Realizations (GBP/unit)
JLR EBITDA (%)
S/A vol. (units)
S/A Realizations (INR/unit)
S/A EBITDA (%)
S/A PAT (INR m)
Net Op Income
Growth (%)
EBITDA
EBITDA Margins (%)
PBT before EO Exp
EO Exp/(Inc)
PBT after EO Exp
Tax rate (%)
Adj PAT
Growth (%)
E: MOSL Estimates
FY17
1Q
2Q
3Q
134,334 139,227 152,245
44,338 45,642 46,200
12.5
10.9
10.1
126,839 134,397 132,553
811,243 765,059 769,912
6.5
3.3
1.4
258 -5,793 -10,452
650,047 635,376 639,330
7.6
3.3
-9.4
90,275 74,298 62,403
13.9
11.7
9.8
34,718 21,304 13,071
9,204 11,311 7,085
25,514 9,993 5,986
28.2
42.5 144.8
28,970 14,788 -2,239
(39.0)
61.1 (107.2)
4Q
175,000
45,746
14.5
148,533
914,725
4.1
-5,369
772,172
-2.9
108,012
14.0
52,011
356
51,655
24.0
43,229
(25.0)
Jinesh Gandhi – Research Analyst
(Jinesh@MotilalOswal.com); +91 22 3982 5416
Deep Shah – Research Analyst
(Deep.Shah@MotilalOswal.com) |
Suneeta Kamath – Research Analyst
(Suneeta.Kamath@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.

Tata Motors
JLR: above estimates; lower fx loss, other expense and operating leverage
drives EBITDA margins
JLR’s (ex Chery JV) wholesale volumes increased by 6.2% YoY to 131,879 units,
as Jaguar volume were impacted by lower sales of XE and F-pace while XF
volume remained strong. In Land Rover, Discovery, Freelander, RR & Velar’s
positive growth was offset by lower RR sport and Evoque’s sales.
Chery JV volumes registered strong growth of 41.8% YoY at 21,331 units (+3.8%
QoQ) driven by XFL in China and robust demand Range Rover Evoque. Including
JV, JLR volumes grew 10% YoY to 153.2k units.
JLR realization at GBP47.9k, grew 1% QoQ (+5% YoY) mainly driven by positive
mix supported by LR contribution at 70% v/s 72% in the previous quarter.
Net sales at GBP 6.3b grew 11.5% YoY (+12.9% QoQ) led by volume and
realization growth of 6.2% YoY and 5% YoY respectively.
JLR EBITDA margins expanded 90bp YoY (+390bp QoQ) to 11.8% driven by
decline in fx hedge loss, other expenses and operating leverage. Absolute
EBITDA increased better than estimates by 21.3% YoY to GBP746m (est
GBP676m).
Realized Fx hedge loss stood at GBP343m (v/s GBP454m in 2QFY18).
Cherry JVs share of PAT came in at GBP61m (v/s GBP77m during 1QFY17 which
included GBP31m of local market incentive).
Further, lower depreciation boosted adj. PAT growth to 26% to GBP308m (est
GBP169m).
JLR’s 2QFY18 FCF was at negative GBP25m, with CFO of positive GBP1,008m and
capex of GBP1,033m. 1HFY18 negative FCF at GBP1.3b.
9 November 2017
2

Tata Motors
Exhibit 1:
JLR
Quarterly
Performance (IFRS)
Y/E March
FY17
FY18
FY17
(GBP Million)
1Q
2Q
3Q
4Q
1Q
2Q
3QE
4QE
Total Volumes (Incl JV)
134,334 139,227 152,245 175,000 138,476 153,210 163,000 200,035 600,806
Growth (%)
17.4
19.3
1.2
7.7
3.1
10.0
7.1
14.3
10.4
Realization (GBP/unit)
44,338 45,642 46,200 45,746 47,483 48,137 48,377 49,451 45,515
Change YoY (%)
-1.9
5.0
10.0
3.9
7.1
5.5
4.7
8.1
4.0
Revenues
5,355 5,668 6,048 7,268 5,599 6,322 6,700 8,820 24,339
Growth (%)
7.1
17.3
4.6
10.1
4.6
11.5
10.8
21.4
9.2
RM/Sales (%)
60.5
61.5
63.4
62.0
63.7
63.3
63.0
62.4
61.9
Staff Costs/Sales (%)
11.3
10.3
10.7
9.0
11.7
10.5
10.6
8.8
10.2
OE/Sales (%)
15.6
17.3
15.8
14.5
16.7
14.4
14.0
12.7
15.7
EBITDA
672
615
611 1,057
442
746
829 1,424
2,955
EBITDA Margins (%)
12.5
10.9
10.1
14.5
7.9
11.8
12.4
16.1
12.1
Depreciation & Amortization
388
410
409
449
450
478
500
581
1,656
Fx loss/ (gain)
-31
-50
62
-17
-100
-69
0
0
-36
Net Finance Cost
12
7
5
11
12
13
6
1
35
Share of JV's PAT
45
33
35
46
77
61
65
67
159
PBT before EO Exp
348
281
170
660
157
385
388
909
1,459
EO Exp/(Inc)
-51
1
-85
-16
-438
0
0
0
-151
PBT after EO Exp
399
280
255
676
595
385
388
909
1,610
Taxes
95
36
88
119
123
77
78
179
338
Adj PAT
265
245
111
544
125
308
311
730
1,153
Growth (%)
-46.1 374.9
-73.1
28.1
-53.0
25.7 179.1
34.3
-22.1
E: MOSL Estimates
FY18E
654,722
9.0
48,474
6.5
27,442
12.7
63.0
10.2
14.3
3,441
12.5
2,009
-169
32
270
1,839
-438
2,277
457
1,471
27.6
2QE Var (%)
153,210
0.0
10.0
47,768
0.8
4.7
6,300
0.4
11.1
63.1
20bp
10.7
-20bp
15.4
-100bp
676
10.3
10.7
110bp
500
0
8
42
210
83.1
0
210
83.1
41
87.0
169
82.1
-31.0
Exhibit 2: Trend in Land Rover’s product mix (incl JV)
Defender
Discovery
RR Sport
RR
FL2/DS
Evoque
Exhibit 3: Trend in Jaguar’s product mix (incl JV)
XE
XJ
XF
F-Type
F-Pace
Others
15 14 18 13 11 9
19 15
39 42 43 45 47 40
23 37
39
42 7
9 6 6 5
7
61 67
5
53 59
10
15 20 19 20 19 23 26
15 57
7 4 5 6
42
8 5
32 25 28 26 25
22 22 23 18 25
17 22
-
-
-
-
33 32 34 27 29 24 25 25 26 27 29 27 26 20
13 18
17 15 9
16 17 15
14 15
22 24 21
21 21
11 12 15 14 11
4 5 5 6 6
22 25 28
29
14 14
12 13
22 19 20
20
12 12 13
6 5 2 12
0
28 33 29 29 26
13
21
19 15
19 23
11 6 7 12 11
0 0 0 0 0
13
14 13 12
Source: Company, MOSL
Source: Company, MOSL
Exhibit 4: Trend in JLR’s market mix (incl JV)
N. America
16
31
19
17
17
17
29
17
22
16
15
29
22
15
18
13
19
22
25
20
17
17
28
19
19
20
18
17
24
22
UK
19
19
25
17
20
Europe
15
18
25
22
19
China
15
20
26
17
22
15
21
21
21
22
ROW
14
25
21
16
25
14
18
26
23
19
13
25
23
19
21
14
25
19
23
19
Source: Company
9 November 2017
3

Tata Motors
Exhibit 5: Share of China volumes gradually rising (incl JV)
30
26
21
18 17 18
19 18
25 24
27
Share of China vols (%)
28
25
20
21
18
25 25
52
55
Exhibit 6: Premium model share declined to 36% levels
61
57
60 59
63
59
Share of premium models (%)*
56
52 50
48 46
44 44
46
44
36
* Incl Chery JV volumes
Source: Company, MOSL
* RR+ RR Sport+ Evoque+ F-Type
Source: Company, MOSL
Exhibit 7: JLR realizations increases ~1%QoQ
Exhibit 8: JLR margins expands YoY led by operating
leverage and lower other expenses
EBITDA (GBP m)
EBITDA Margin (%)
Source: Company, MOSL
Source: Company, MOSL
Key takeaways from the call
Maintains 10% retail growth guidance for FY18:
While outlook for autos in
developed market has deteriorated in last few months, JLR maintained its 10%
retail growth target for FY18 (implying 17% residual growth) driven by new
product launches. Recent launches like Velar and New Discovery enjoys good
customer response. Also, they don't expect substantial drop in volumes of
RR/RR Sport in 3QFY18 despite phase-out for MY18.
Production ramp-up for new models at Solihull would gradual ease, especially
after shift of Discovery to Slovakia plant by 3QFY19.
Competitive intensity remains high,
especially in luxury sedan segment. JLR is
not participating in heavy discounting and would not chase volumes at any
price.
Fx hedge losses would reduce substantially from 4QFY18
onwards. Unrealized
current Fx hedge losses have further reduced to GBP793m as of Sep-17 (v/s
GBP1.1b as of Jun-17 v/s GBP1.6b as of Mar-17). Further, non-current hedge
loss (>1yr) now stands at only GBP299m (v/s GBP564m as of Jun-17 v/s GBP1.1b
as of Mar-17).
Targeting 8-10% EBIT margins over medium term:
Guides for EBITDA margins in
FY18 to remain stable over FY17 of ~12%. EBIT margin target of 8-10% in
medium term factors in for lower margins of EVs and higher variable marketing
spend.
9 November 2017
4

Tata Motors
JLR is focused on cost efficiencies
(low-cost manufacturing base, significant
material cost reduction etc) to off-set cost of electrification and potential
normalization of China margins.
On the EV side,
JLR to launch plug-in hybrid Range Rover and Range Rover Sport
in 2018 in addition to planned launch of I-Pace battery EV in mid-2018.
JLR Capex:
Guidance maintained at GBP4-4.35b FY18.
Exhibit 9: JLR’s unrealized Fx hedge losses reducing sharply (GBP m)
FY15
1,591
1,070
521
593
793
810
655
1,136
564
299
FY16
FY17
1QFY18
2QFY18
Fx unrealized hedge loss - Current
Fx unrealized hedge loss - Non-Current
Source: Company, MOSL
Standalone: Better mix, cost reduction and operating leverage propels
margins
S/A volumes increased by 14.1% YoY (+39.8% QoQ) to 153.3k units, driven by
15.8% YoY growth in CVs while PV volumes increased by 10.4% YoY. Inventory
build-up, recovery in CV demand post GST supported CV sales while new
products drive PV sales.
Realizations growth was better than estimates at 18.4% YoY (+9.3% QoQ) to
INR905.8k (est ~INR854k) driven by better mix and ~1% price increase, despite
higher discounts. Product mix remain favourable with higher contribution from
M&HCV.
Consequently, net revenue increased 35% YoY (+52.7% QoQ) to INR138.9b (est
INR130.9b).
EBITDA almost doubled at INR9.7b (est INR5.9b) led by better mix, cost
reduction initiatives and operating leverage. Consequently, EBITDA margin came
in above estimate at 7% (est. 4.5%), expanded 370bp YoY (+700bp QoQ).
Higher other income at INR1.4b (est INR1.25b) restricted net loss to INR2.9b
(est INR4.7b) as against net loss of INR4.7b in 1QFY18 and loss of INR5.8b in
2QFY17.
9 November 2017
5

Tata Motors
Exhibit 10:
Quarterly Performance (Standalone)
Y/E March
Total Volumes (nos)
Change (%)
Avg Realization (INR)
Change (%)
Net Operating income
RM Cost (% of Sales)
Staff Costs (% of sales)
Other Exp (% of sales)
EBITDA
EBITDA Margins (%)
Non-Operating Income
Forex Gain / (Loss)
Interest
Depreciation & Amort.
Product Dev. Expenses
PBT before EO Exp
EO Exp/(Inc)
PBT after EO Exp
Effective Tax Rate (%)
PAT
Change (%)
Adj PAT
Change (%)
E: MOSL Estimates
FY17
FY18
FY17
542,322
1.8
818,038
1.7
443,640
70.7
8.0
17.5
17,007
3.8
9,788
2,525
15,902
29,694
4,545
-20,821
2,891
-23,711
-2.5
-24,303
-1,070
-21,341
LP
FY18E
2QE Var (%)
580,688 153,321
0.0
7.1
14.1
885,394 853,952
6.1
8.2
11.2
514,137 130,929
6.1
72.8
71.0
320bp
6.9
6.9
-50bp
14.5
17.6
-520bp
29,895 5,851
66.0
5.8
4.5
250bp
10,500 1,250
13.5
-649
0
15,935 3,700
20.0
29,645 7,000
7.2
4,627 1,000
11.2
-10,462 -4,599
-42.2
0
0
-10,462 -4,599
-42.2
-2.5
-2.5
-860bp
-10,723 -4,714
-37.4
-56 -25.3
-10,723 -4,714
-37.4
LP
LP
1Q
2Q
3Q
4Q
1Q
2Q
3QE
4QE
126,839 134,397 132,553 148,533 109,692 153,321 148,268 169,407
8.3
14.4
7.6
1.2 -13.5
14.1
11.9
14.1
811,243 765,059 769,912 914,725 829,080 905,798 869,566 917,244
1.9 -16.0
-5.6
4.9
2.2
18.4
12.9
0.3
102,897 102,822 102,054 135,867 90,943 138,878 128,929 155,387
66.9
72.2
73.3
70.4
70.6
74.2
74.5
71.2
8.7
8.6
8.3
6.9
9.8
6.4
6.7
5.9
17.8
16.0
17.1
18.7
19.6
12.4
12.5
15.1
6,697 3,358 1,390 5,562
31 9,710 8,110 12,044
6.5
3.3
1.4
4.1
0.0
7.0
6.3
7.8
6,246 1,460
940 1,143 6,399 1,419 1,200 1,482
-788 1,202
-442 2,553
80
-728
0
0
3,491 3,728 4,137 4,545 3,678 4,441 4,000 3,816
7,122 7,186 7,290 8,096 6,748 7,506 7,650 7,741
1,162
699
770 1,915
752 1,112 1,100 1,663
379 -5,593 -10,309 -5,298 -4,669 -2,659 -3,440
306
0
497
8 2,883
0
0
0
0
379 -6,089 -10,316 -8,181 -4,669 -2,659 -3,440
306
32.0
-3.6
-1.4
-1.3
0.0 -11.1
-2.5 -39.4
258 -6,308 -10,459 -8,290 -4,671 -2,953 -3,526
426
-91
118
664
-308 -1,914
-53
-66
-105
258 -5,793 -10,452 -5,369 -4,671 -2,953 -3,526
426
-22.6
LP
LP
LP
LP
LP
LP
LP
Exhibit 11: Trend in segment mix
Segment
M&HCVs
Contribution (%)
LCVs
Contribution (%)
Total CVs
Contribution (%)
Cars
Contribution (%)
UVs
Contribution (%)
Total Volumes
2QFY18
44,780
29.2
61,469
40.1
106,249
69.3
36,134
23.6
10,938
7.1
153,321
2QFY17
39,160
29.1
52,590
39.1
91,750
68.3
37,453
27.9
5,194
3.9
134,397
YoY (%)
14.4
16.9
15.8
-3.5
110.6
14.1
1QFY18
27,465
25.0
46,206
42.1
73,671
67.2
31,998
29.2
4,023
3.7
109,692
QoQ (%)
63.0
33.0
44.2
12.9
171.9
39.8
Source: Company, MOSL
Exhibit 12: Healthy realizations growth a positive surprise
Avg. Realization
Growth YoY %
Exhibit 13: EBITDA margin improves YoY/QoQ
EBITDA (INR m)
22,000
14,000
6,000
-2,000
EBITDA Margin (%)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY14
FY15
FY16
FY17
FY18
-10,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY14
FY15
FY16
FY17
FY18
Source: Company, MOSL
Source: Company, MOSL
9 November 2017
6

Tata Motors
Standalone: Key takeaways from the call
TTMT CV has taken average
price increase of ~1% in August and October
to
mitigate prevailing discount pressure.
Discounting in M&HCV remains high,
with 15-20% increase on YoY basis and
marginal increase on QoQ basis.
It is confident of PAT break-even in FY18,
driven by cost reduction and volume
increase. Cost reduction achieved in 2QFY18, especially on other expenses, are
sustainable.
Valuation and view
Strong product cycle positioning for all major JLR brands to aid volumes in
FY18-19E:
With ~50% of volumes coming from new/refreshed over the next two
years, as it launches two new products, 6 refreshes and foray into the EV space
before its peers. We expect JLR's volumes (including JV) to grow at a CAGR of
14% over FY17-19, driven by 12% CAGR for Land Rover and 18% CAGR for Jaguar
on the back of the launch of two new models and six major refreshes.
JLR’s profitability has many levers:
JLR has several levers, both cyclical and
structural, in the form of (a) favorable Fx, as realized hedge rates improve from
3QFY18, (b) better product mix (higher share of RR, RR Sport, and Discovery), (c)
operating leverage, (d) cost savings on modular platform on full rollout of
modular strategy, and (e) manufacture of Ingenium engines in-house v/s
sourcing engines from Ford. The convergence of the multiple factors stated
above is expected to drive up EBITDA margin by 450bp from 12.1% in FY17 to
16.6% in FY19E.
PV business turnaround on the anvil? :
With Tiago & Tigor having good start
and new launches scheduled over FY18, we believe the worst is behind for the
PV business. Breakeven point for the PV business is estimated at 55% utilization
levels, which could be achieved in next 2-3 years. This could add 6-7% to our
FY19 SOTP.
Strong margins, reduced capex intensity to result in strong FCFF and RoE
improvement:
Post commissioning of the Slovakia plant, capex intensity for JLR
is likely to reduce from FY19. This coupled with improvement in operating
performance would improve FCFF in FY18 and FY19. Consolidated RoE should
improve over FY17-19E by 18.5pp to 28.3%.
Valuation and view:
We have upgraded consol EPS by 23%/6% for FY18/19, as
we build in margin expansion at JLR and S/A business. JLR is poised for sharp
recovery, driven by (a) promising product pipeline, (b) beneficial Fx movement,
(c) conducive mix, (d) favorable operating leverage, and (e) improved FCF
conversion. The India business is interestingly positioned with several levers to
drive turnaround for both PVs and CVs. We have maintained EV/EBITDA
multiple for JLR to 3x while we value S/A business at EV/EBITDA of 8x. The stock
trades at 6.8x FY19E EPS & 2.9x EV/EBITDA. We maintain
Buy
with TP of INR575
(Sep-19 SOTP based).
9 November 2017
7

Tata Motors
Exhibit 14: Revised Estimates
Key Assumptions
Consolidated
Net Sales
EBITDA
EBITDA Margins (%)
Net Profit
Cons EPS
JLR (IFRS, GBP M)
Volumes ('000 units) incl JV
EBITDA
EBITDA Margins (%)
Net Profit
Standalone
Volumes ('000 units)
EBITDA
EBITDA Margins (%)
Net Profit
Rev
2,959
372
12.6
84
24.6
655
3,441
12.5
1,421
581
30
5.8
(10.7)
FY18E
Old
2,970
357
12.0
68
20.0
666
3,402
12.3
1,275
594
22
4.3
(15.8)
Chg (%)
-0.4
4.1
50bp
22.8
22.8
-1.7
1.2
30bp
11.4
-2.2
35.2
150bp
32.1
Rev
3,622
577
15.9
220
64.8
775
5,597
16.6
2,757
FY19E
Old
3,726
573
15.4
208
61.3
810
5,628
16.1
2,685
Chg (%)
-2.8
0.7
60bp
5.6
5.6
-4.4
-0.5
50bp
2.7
642
660
-2.6
44
37
19.6
7.7
6.5
120bp
(0.1)
(6.5)
98.5
Source: Company, MOSL
Exhibit 15: TATA MOTORS: Sum-of-the-parts valuation
INR B
Tata Motors - Standalone
JLR (Adj for R&D capitalization)
JLR - Chery JV EBITDA Share
HV Axles
HV Transmission
Tata Technologies
Tata Daewoo
Total EV
Less: Net Debt (Ex FCCB & TMFL)
Add: Other Investments
Tata Motors Finance
Other Associates/JVs
Tata Sons
Total Equity Value
Fair Value (INR/Sh) - Ord Sh
Upside (%)
Fair Value (INR/Sh) - DVR
Upside (%)
EV/EBITDA
EV/EBITDA
Fully Diluted
P/BV
P/BV
20% discount
1
1
39
81
104
1,819
536
21.7
374
51.9
42
123
104
2,087
615
39.6
429
74.3
Source: MOSL
Valuation Parameter
EV/EBITDA
EV/EBITDA
EV/EBITDA
EV/EBITDA
EV/EBITDA
EV/EBITDA
EV/EBITDA
Multiple (x)
8.0
3.5
3.5
8.0
8.0
8.0
5.0
FY19E
354
1,172
129
8
6
54
23
1,745
150
FY20E
435
1,144
187
8
6
60
25
1,865
47
9 November 2017
8

Tata Motors
Exhibit 16:
Comparative valuation
CMP
(INR)*
Auto OEM's
Bajaj Auto
Hero MotoCorp
TVS Motor
M&M
Maruti Suzuki
Tata Motors
Ashok Leyland
Eicher Motors
Auto Ancillaries
Bharat Forge
Exide Industries
Amara Raja Batteries
BOSCH
Endurance Tech
3,200
3,604
695
1,362
8,202
440
115
30,820
719
202
735
21,103
1,152
Rating
TP
(INR)
3,753
3,819
764
1,585
9,466
575
134
36,487
844
254
854
22,781
1,229
P/E (x)
FY18E FY19E
22.0
19.7
46.5
19.6
28.5
17.9
25.7
37.3
37.6
25.6
28.7
39.0
38.9
18.3
18.6
26.9
16.7
21.5
6.8
18.5
27.5
27.6
20.9
22.3
30.2
29.3
EV/EBITDA (x)
FY18E FY19E
16.6
12.4
29.3
14.7
17.6
4.8
12.7
28.4
20.6
15.2
15.5
24.1
18.5
13.2
11.7
17.6
12.7
13.8
2.9
9.4
23.0
16.5
12.6
11.9
18.8
15.3
RoE (%)
FY18E FY19E
23.3
33.7
26.5
13.5
20.5
13.4
20.4
36.1
20.1
12.5
15.8
17.8
21.8
25.3
31.1
35.6
14.3
23.0
28.3
25.2
36.4
23.2
13.7
17.7
20.5
24.0
Div Yield (%) EPS CAGR (%)
FY18E FY19E
FY17-19E
2.0
2.5
0.4
1.5
1.0
0.1
1.7
0.5
0.6
1.1
0.5
0.9
0.3
2.5
2.5
0.6
1.5
1.2
0.1
1.9
0.6
0.7
1.1
0.7
1.1
0.6
15.0
7.1
48.3
22.7
23.8
80.8
16.9
35.2
41.0
9.1
8.4
21.5
29.3
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
9 November 2017
9

Tata Motors
Tata Motors|
Story in Charts: Strong recovery in EPS with ~51% CAGR
Expect JLR (incl JV) volume CAGR of 11.6% over FY17-FY20
led by new launches
JLR volumes (incl JV; '000 units)
18.3
15.5
9.5
15.6
10.4
9.0
Growth (%)
18.3
14.8
7.9
Exhibit 17: JLR Margins to increase as volume ramps-up and
Fx hedge turns favorable
EBITDA (GBP m)
17.5
18.9
14.1
12.1
12.5
EBITDA margin (%)
16.6
16.0
FY13
FY14
FY15
FY16
FY17
FY18E FY19E FY20E
Source: Company, MOSL
FY13
FY14
FY15
FY16
FY17
FY18E FY19E FY20E
Source: Company, MOSL
Exhibit 18: JLR’s to remain FCF positive despite high
capex plans
CFO
Capex
FCF
Exhibit 19: S/A business to recover on new product launches
and marketing initiatives
Revenues (INR b)
13.0
18.0
5.9
3.5
Growth (%)
15.9
11.7
-17.6
FY13
FY14
FY15
FY16
FY17E FY18E FY19E FY20E
Source: Company, MOSL
FY12
FY13
-23.4
FY14
FY15
FY16
FY17E FY18E FY19E
Source: Company, MOSL
Exhibit 20: S/A margins to improve on volume recovery and
cost control initiatives
EBITDA (INR b)
7.9
4.8
34
-1.4
(5)
FY13
FY14
-2.2
(8)
FY15
FY16
FY17E FY18E FY19E FY20E
Source: Company, MOSL
5.8
3.8
EBITDA Margins (%)
7.7
8.5
Exhibit 21: S/A EPS CAGR of 13.1% over FY17-20E
Revenues (INR b)
18.0
5.9
3.5
Growth (%)
15.9
11.7
11.6
21
17
30
44
54
-17.6
-23.4
FY13
FY14
FY15
FY16
FY17E
FY18E
FY19E
FY20E
Source: Company, MOSL
9 November 2017
10

Tata Motors
Key operating metrics
Exhibit 22: Snapshot of Revenue model
000 units
JLR
Jaguar
Growth (%)
% of Total JLR Vols
Land Rover
Growth (%)
% of Total JLR Vols
Total Volumes
Growth (%)
ASP (GBP '000/unit)
Growth (%)
Net JLR Sales (GBP b)
Growth (%)
DOMESTIC
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 (%)
FY13
58
7.0
15.5
314
20.7
84.5
372
18.3
42
-1.3
16
16.8
153
-31.1
429
17.8
581
-0.7
229
-32.2
810
-12.2
552
447
-17.6
FY14
79
37.2
18.4
351
11.6
81.6
430
15.5
45
6.3
19
22.8
122
-19.7
299
-30.3
421
-27.5
145
-36.5
567
-30.1
605
343
-23.4
FY15
76
-3.5
16.3
394
12.4
83.7
471
9.5
46
3.0
22
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
20.0
442
12.2
86.8
509
8.2
44
-5.8
22
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
33.4
422
-4.5
78.9
535
5.0
46
4.0
24
9.2
176
-0.3
209
2.1
385
1.0
157
3.9
542
1.8
818
444
3.5
FY18E
186
4.0
32.8
469
11.1
82.8
566
5.9
48
6.5
27
12.7
174
-0.9
227
8.7
401
4.3
179
13.8
581
7.1
885
514
15.9
FY19E
247
33.0
36.9
528
12.5
78.8
669
18.2
50
4.0
34
23.0
190
9.0
253
11.5
443
10.5
199
11.0
642
10.6
894
574
11.7
FY20E
267
8.1
39.0
569
7.8
83.0
685
2.4
52
3.0
36
5.5
203
7.0
283
11.7
486
9.7
221
11.1
707
10.1
906
641
11.6
9 November 2017
11

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 (%)
2015
2,631,590
13.0
2,210,452
421,138
16.0
133,886
287,252
28,752
48,615
8,987
930
917
217,026
76,429
35.2
140,597
-0.3
5.3
-868
134
139,863
140,465
-1.1
2016
2,730,456
3.8
2,312,693
417,763
15.3
167,108
250,655
34,688
48,891
8,854
18,504
16,169
141,258
30,251
21.4
111,007
-21.0
4.1
-989
5,775
115,793
130,334
-7.2
2017
2,696,925
-1.2
2,327,802
369,124
13.7
179,050
190,074
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
2018E
2,958,750
9.7
2,586,995
371,755
12.6
203,575
168,180
34,415
42,954
7,368
7,950
-13,716
103,946
47,014
45.2
56,932
-6.1
1.9
-1,068
23,353
79,216
83,571
24.2
2019E
3,621,588
22.4
3,044,239
577,349
15.9
245,349
332,000
33,181
44,744
7,684
0
0
261,759
68,447
26.1
193,312
239.5
5.3
-1,179
27,837
219,970
219,970
163.2
(INR Million)
2020E
3,922,588
8.3
3,312,504
610,084
15.6
288,638
321,445
32,331
45,663
8,158
0
0
251,609
63,614
25.3
187,995
-2.8
4.8
-1,281
41,407
228,120
228,120
3.7
Balance Sheet (Cons.)
Y/E March
Share Capital
Reserves
Net Worth
Loans
2015
6,438
556,181
562,619
692,115
-13,900
1,245,167
1,582,066
744,241
837,825
286,401
46,970
153,367
1,034,685
292,723
125,792
321,158
256,948
1,114,081
574,073
328,305
-79,396
1,245,167
2016
6,792
782,732
789,524
619,612
44,748
1,458,212
1,976,068
911,348
1,064,720
259,189
7,598
237,670
1,102,234
326,557
135,709
304,604
254,033
1,213,200
615,618
460,226
-110,965
1,458,212
2017
6,792
573,827
580,619
744,891
11,740
1,341,781
2,043,106
1,090,398
952,708
336,988
6,733
203,379
1,237,735
350,853
140,756
360,779
291,474
1,395,762
625,326
622,314
-158,027
1,341,782
2018E
6,792
657,283
664,075
726,807
11,740
1,408,222
2,471,810
1,293,973
1,177,837
250,000
6,733
226,732
1,161,445
385,043
162,123
203,932
306,474
1,414,525
664,705
587,697
-253,080
1,408,222
2019E
6,792
881,493
888,285
708,724
11,740
1,615,527
2,847,860
1,539,322
1,308,538
250,000
6,733
254,569
1,383,233
471,303
198,443
278,139
321,474
1,587,545
793,773
595,330
-204,313
1,615,527
(INR Million)
2020E
6,792
1,113,853
1,120,645
690,640
11,740
1,831,085
3,232,752
1,827,960
1,404,792
250,000
6,733
295,976
1,539,340
510,474
214,936
353,582
336,474
1,665,757
859,745
591,075
-126,417
1,831,085
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: MOSL Estimates
9 November 2017
12

Tata Motors
Financials and Valuations
Ratios (Con.)
Y/E March
Basic (INR)
EPS
EPS Fully Diluted
Normalized EPS ^
EPS Growth (%)
Cash EPS
Book Value (Rs/Share)
DPS
Payout (Incl. Div. Tax) %
Valuation (x)
Consolidated P/E
Normalized 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)
2015
43.6
43.6
14.4
-1.1
85.2
174.8
0.0
0.0
10.1
30.6
3.9
0.6
2.5
0.0
23.1
15.7
39.2
17
41
80
2.1
1.2
2016
38.4
38.4
7.2
-12.0
87.6
232.5
0.0
0.0
11.5
61.5
3.8
0.6
1.9
0.0
19.3
15.1
34.5
18
44
82
1.9
0.8
2017
19.8
19.8
-10.6
-48.4
72.5
171.0
0.0
0.0
22.2
-41.5
4.5
0.6
2.6
0.0
9.8
9.2
22.6
19
47
85
2.0
1.3
2018E
24.6
24.6
-7.2
24.2
84.6
195.6
0.3
1.3
17.9
-61.0
4.8
0.6
2.3
0.1
13.4
7.0
15.8
20
48
82
2.1
1.1
2019E
64.8
64.8
26.2
163.2
137.0
261.6
0.3
0.5
6.8
16.8
2.9
0.5
1.7
0.1
28.3
16.6
31.4
20
48
80
2.2
0.8
2020E
67.2
67.2
19.2
3.7
152.2
330.0
0.3
0.5
6.6
22.9
2.5
0.4
1.3
0.1
22.7
14.3
27.2
20
48
80
2.1
0.6
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
(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: MOSL Estimates
2015
139,863
7,777
133,864
-41,940
-36,718
136,570
339,415
20,191
359,606
-315,396
-37,570
-352,966
0
122,288
-63,070
-7,204
52,014
58,655
152,629
211,283
2016
110,238
8,258
170,142
-19,939
25,515
96,855
391,069
8,857
399,925
-326,232
-68,134
-394,366
74,332
-47,483
-57,039
-1,739
-31,930
-26,371
219,875
193,505
2017
74,544
7,545
179,050
-65,520
103,236
1,068
299,923
11,146
311,069
-144,837
34,291
-110,546
-283,449
125,280
-42,380
0
-200,550
-27
360,779
360,752
2018E
79,216
7,368
203,575
-47,014
-61,794
1,068
182,420
-7,950
174,470
-341,716
-23,353
-365,069
5,344
-18,084
-42,954
-1,104
-56,797
-247,396
203,932
-43,465
2019E
219,970
7,684
245,349
-68,447
25,440
1,179
431,174
0
431,174
-376,049
-27,837
-403,886
5,344
-18,084
-44,744
-1,104
-58,588
-31,300
278,139
246,839
2020E
228,120
8,158
288,638
-63,614
-2,453
1,281
460,130
0
460,130
-384,893
-41,407
-426,300
5,344
-18,084
-45,663
-1,104
-59,508
-25,677
353,582
327,905
9 November 2017
13

Tata Motors
Corporate profile
Company description
Exhibit 1: Sensex rebased
Tata Motors is the largest CV manufacturer in India
with 55% market share in MHCV and 37% in LCVs. It
also manufactures passenger cars and UVs. In FY09,
it acquired Jaguar & Land Rover from Ford for
USD2.5b.
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Sep-17
Promoter
DII
FII
Others
36.4
15.3
22.6
25.8
Jun-17
34.7
16.1
23.5
25.7
Sep-16
33.0
14.5
26.1
26.4
Source: Capitaline
Exhibit 3: Top holders
Holder Name
Citibank N.A. New York Nyadr Department
Life Insurance Corporation Of India
Government Of Singapore
Icici Prudential Life Insurance Company Ltd
Citibank N.A. New York Nyadr Department
% Holding
16.8
5.2
1.9
1.5
16.8
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
N Chandrasekaran
Ratan N Tata
Guenter Butschek
Satish B Borwankar
H K Sethna
Designation
Chairman
Chairman Emeritus
Managing Director & CEO
Executive Director
Company Secretary
Exhibit 5: Directors
Name
Ralf Speth
Falguni Nayar
R A Mashelkar
Vinesh K Jairath
Name
Ravindra Pisharody
Nasser Munjee
Subodh Bhargava
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
B S R & Co LLP
Deloitte Haskins & Sells LLP
Type
Statutory
Statutory
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY18
FY19
FY20
MOSL
forecast
24.6
64.8
67.2
Consensus
forecast
28.4
44.8
52.7
Variation (%)
-13.4
44.7
27.5
Source: Bloomberg
Source: Capitaline
9 November 2017
14

Tata Motors
NOTES
9 November 2017
15

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities in
the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a)
from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) 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 company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any 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 MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the
research report.
Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject company in
the past 12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
d)
Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.
MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. MOSL and / or its affiliates do and seek to do business including investment banking with
companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research
Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to,
copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOSL. The report is based on the facts, figures and information that are considered
true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not
been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice.
The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though
disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Tata Motors
Disclosure of Interest Statement
Analyst ownership of the stock
Tata Motors
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to
subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC)
pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with
Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any
investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities,
products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research
Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is
not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S.
persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional
investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S.
registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and
therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in
the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person
or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of
offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or
appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations
as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative
products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the
views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time
without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities
mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities
functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is
being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not
directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would
be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to
certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or
representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The
person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this
information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth
management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
9 November 2017
16