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JLR 4Q wholesales above est, up 7.5% YoY

Retails up 12.4% YoY for 4QFY21, down 13.6% for FY21

Wholesale volumes

* Jaguar Land Rover (JLR) 4QFY21 wholesale volumes (incl. CJLR) grew ~7.5% YoY to ~136.5k units. Jaguar wholesales declined ~3.4%, while LR grew ~11.3%. JLR sales saw significant improvement sequentially (+14% QoQ).

* This has led to dilution in the mix as the share of Jaguar has improved ~5.4pp QoQ.

* The sharp beat in quarterly wholesales would lead to a stronger-thanestimated 4QFY21 performance. Based on our volume estimates for JLR, we expect TTMT's 4QFY21 consol PAT at INR36.4b. With actual wholesale volumes, the revised 4QFY21 consol PAT estimate is INR51.3b.

* For FY21, JLR wholesale volumes declined 21% to 124.8k units. For the full year, Jaguar/LR wholesales declined 37%/15%.

Retail volumes

* JLR 4QFY21 retail volumes (incl. CJLR) grew ~12.4% YoY to ~123.5k units. Jaguar retails declined ~17% to 23.5k units, while LR retails grew ~22.6% to 100k units. JLR sales declined sequentially (-4% QoQ). For FY21, JLR’s retail volumes declined 13.6% to 439.5k units. Jaguar/LR retails declined 30.5%/7% for FY21.

* The new Land Rover Defender contributed to strong YoY growth with 16.9k retails. This was driven by other LR models, such as LR Discovery Sport (+28.6%), Range Rover Sport (+20.7%), and Range Rover (+15.8%). Jaguar models such as XF (+28.4%), XE (+5.6%) and F-type (+55.8%) further aided growth.

* China retails grew 127% YoY (COVID impact in base quarter) and US retails grew 10% YoY. The UK (-7%), EU (-5%), and RoW (-10%) were under pressure.

* For FY21, China retails grew 23.4% YoY. The UK declined ~22.2% YoY, North America ~14.3% YoY, Europe 25.9% YoY, and RoW 26.7% YoY.

* 12 out of JLR’s 13 nameplates are now available with an electrified option. PHEV (plug-in hybrids) are available in eight models and MHEV (mild hybrids) in 11 models.

* 62% of electrified vehicles were retailed in 4QFY21, with the contribution of MHEV being the highest at 53%, PHEV at 7%, and Jaguar i-PACE at 2%.

* Mr Felix Brautigam, Jaguar Land Rover Chief Commercial Officer, stated, “While the Covid-19 pandemic has an ongoing impact on the global auto industry, I am pleased to end the financial year with sales up year-on-year in the last quarter. Encouragingly, the steady recovery throughout the year follows the direction of our Reimagine strategy: the quality of our sales improved even more than the volume, with a focus on our most profitable car lines, higher specifications and lower incentives. Despite very different COVID restrictions worldwide we also achieved our objective of balanced sales across our key markets….The completely refreshed Discovery and updated Velar, which is now also available as plug-in hybrid, will strengthen Land Rover sales further.”

* It expects to report significant positive free cash flow in 4Q (seasonal factor) and achieve breakeven to positive cash flow for the full year.

* The stock trades at 7.9x FY23E consol. EPS and 1.5x P/B. Maintain Buy, with Target Price of INR415 (Mar’23 SOTP-based).

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