Buy Tata Motors Ltd For Target Rs.530 - Motilal Oswal
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Numbers below estimate; volumes rise 73% YoY to 72.5k
PVs in line with estimate at 41.6k units; CVs below our estimate at 30.8k units
TTMT’s CV volumes grew 85% YoY (below our estimate) to 30.8k units (est. 40.85k units). M&HCV volumes grew 70% YoY to ~12.5k (below our estimate of 18.2k). LCV volumes rose 97% YoY to ~18.3k units (below our estimate of 22.6k).
PV volumes grew 61% YoY (in line with est.) to 41.6k units (v/s est. 40.9k units)
We are estimating ~28% YoY growth in M&HCV volumes for FY23, implying a 25.5% YoY residual growth, or monthly a run-rate of ~12.5k units. For LCVs, we estimate 24% YoY volume growth in FY23E, implying a residual growth of 20%, or a run-rate of 18.3k units
For PVs, we are estimating 37% YoY growth in FY23, implying a residual growth of 35% or monthly run rate of 42.5k units.
Overall, we estimate a 31% YoY growth in total volumes for FY23E, implying a 29% YoY residual growth, or a monthly run-rate of ~80k units.
The stock trades at 4.6x FY23E/3.4x FY24E EV/EBITDA. We maintain our BUY rating with a TP of ~INR530 (premised on Mar’24E SoTP).
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