Monthly Update | August 2013

September 13, 2013

Tata Motors
Jaguar Land Rover Monthly sales update
Exhibit 1: JLR - wholesale volumes
Aug-13 Aug-12 chg (%) Jul-13 chg (%) YTDFY14 YTDFY13 chg (%)

ACCUMULATE
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Automobile 107,131 15,067 1.1 352/245 1,012,902 2 19,782 5,851 TAMO.BO TTMT@IN

`333 `360
12 Months

Jaguar

5,222

2,960

76.4

7,174

(27.2) (8.3) (12.1)

30,973 125,704 156,677

18,798 115,635 134,433

64.8 8.7 16.5

Land Rover 25,673 21,100 Total 30,895 24,060

21.7 27,988 28.4 35,162

Source: Company, Angel Research

Jaguar and Land Rover (JLR) sustained its strong volume momentum in August, recording a better-than-expected wholesale volume growth of 28.4% yoy to 30,895 units. The growth was led by the strong performance of Jaguar and Land Rover models on the back of success of new launches and easing of capacity constraints. On a mom basis though, volumes declined by 12.1%, ahead of the number plate change that happens every September in the UK. Jaguar continued its impressive run, posting a growth of 76.4% yoy driven by incremental volumes from the F-type and growth in the XF model led by the introduction of the Sportbrake, AWD and smaller engine variants. Land Rover sales too recorded a robust growth of 21.7% yoy on the back of the dispatches of the new Range Rover Sport.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 34.4 12.1 46.2 7.3

Exhibit 2: Global peers wholesale volumes

Aug-13 Aug-12 chg (%) Jul-13 chg (%) YTDFY14 YTDFY13 chg (%)

Audi BMW

118,650 108,100 118,743 102,730 91,316

9.8 131,300 15.6 128,594 18.7 116,790

(9.6) (7.7) (7.2)

661,000 670,201 594,742

614,850 606,478 527,647

7.5 10.5 12.7

Abs. (%) Sensex Tata Motors

3m 3.9 13.5

1yr 9.9 26.7

3yr 5.2 64.0

Mercedes 108,417

Source: Company, Angel Research

Global luxury car manufacturers recorded a strong growth with highest sales ever for August driven by continued growth momentum in the Asia/Pacific and North America region. Audi registered a strong growth of 9.8% yoy driven by the strong performance of the A3 family and Q3 and Q5 SUV models. According to the company, the overall growth was driven by a strong performance in the Asia Pacific (up 22.4% yoy) and North America (up 19.6% yoy) regions, even as the environment remains challenging in Europe (volumes down 3.4% yoy). BMW recorded a strong 15.6% yoy growth led by continued momentum in the 3 and 5 series and X3 series and also due to robust growth in Asia Pacific (up 27.9% yoy) and North America (up 29.3% yoy). Sales in Europe though declined by 2.3% during the month. Mercedes-Benz too registered a robust growth of 18.7% yoy driven by the success of its new models including the E Class and compact models. Geographically, Asia Pacific, North America and the Europe region recorded a strong growth of 28.6%, 20.5% and 12% yoy respectively.

Yaresh Kothari
+91 22 39357800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

Tata Motors | August 2013

Exhibit 3: Retail volumes JLR

Aug-13 Aug-12 chg (%) Jul-13 chg (%) YTDFY14 YTDFY13 chg (%)

Jaguar Total

5,405

2,819

91.7

6,157

(12.2) (11.8) (11.9)

29,021 125,161 154,182

20,181 113,419 133,600

43.8 10.4 15.4

Land Rover 22,447 19,005 27,852 21,824

Source: Company, Angel Research

18.1 25,454 27.6 31,611

JLR sustained its strong volume momentum in retail sales in August 2013, registering a growth of 27.6%, driven by the robust performance of the newly launched models and the Range Rover Evoque. The volume growth ex. Evoque too remained strong (up 24.8% yoy) and was driven primarily by the recently launched Jaguar models. Geographically, the volume momentum continued across the world (except Europe which witnessed a decline of 1.4% yoy) with China, North America, UK and the Asia Pacific region witnessing a robust growth of 43.2%, 39.6%, 36.3% and 35.2% yoy respectively. Meanwhile, on a mom basis, total sales declined by 11.9%, primarily due to a 76.9% yoy decline in volumes in the UK ahead of the number plate change that happens every September, and 25.3% decline in Europe volumes. Jaguar continued with its impressive sales performance, posting a growth of 91.7% yoy, driven by growth in the XF and XJ models (on the back of introduction of the Sportbrake, AWD and smaller engine variants). Geographically, Jaguar posted a robust growth in all the major markets with China (up 278% yoy), North America (up 70.2% yoy) and Europe (up 74.6% yoy) being the top three performers during the month. Land Rover sales too recorded a strong growth of 18.1% yoy led by continued momentum in Range Rover Evoque, Freelander and Discovery models which registered a growth of 34.4%, 22.7% and 14.3% yoy respectively. Additionally the dispatches of the new Range Rover and new Range Rover Sport too aided the growth during the month. Geographically the growth was strong across all the markets (except Europe) with the Asia Pacific region, UK and North America being the top three growth drivers recording a growth of 37.2%, 36.1% and 31.5% yoy respectively. Sales in Europe however declined by 11.1% yoy during the month.

Exhibit 4: Jaguar retail sales by car-type

Aug-13 Aug-12 chg (%) Jul-13 chg (%) YTDFY14 YTDFY13 chg (%)

XF New XJ XK F type Total Jaguar

2,898 1,571 128 808 5,405

1,518 1,043 258 2,819

90.9 50.6 (50.4) 91.7

3,152 1,725 284 996 6,157

(8.1) (8.9) (54.9) (12.2)

16,252 7,763 1,241 3,765 29,021

12,038 6,637 1,506 20,181

35.0 17.0 (17.6) 43.8

Source: Company, Angel Research

September 13, 2013

Tata Motors | August 2013

Exhibit 5: Land Rover retail sales by car-type

Aug-13 Defender Discovery Freelander Range Rover Range Rover Evoque Range Rover Sport New Range Rover New Range Rover Sport Total Land Rover Aug-12 Chg (%) Jul-13 Chg (%) YTDFY14 YTDFY13 Chg (%)

766 3,417 3,626 5 8,599 1,183 2,723 2,128

787 2,990 2,954 1,770 6,399 4,023 82

(2.7) 14.3 22.7 (99.7) 34.4 (70.6)

1,041 3,880 4,602 14 9,833 2,031 3,537 516

(26.4) (11.9) (21.2) (64.3) (12.5) (41.8) (23.0) 312.4

5,475 18,454 21,272 121 45,406 14,436 17,225 2,772

5,459 16,490 18,579 10,502 41,978 20,329 82 0 113,419

0.3 11.9 14.5 (98.8) 8.2 (29.0)

22,447 19,005

18.1 25,454

(11.8) 125,161

10.4

Source: Company, Angel Research

Exhibit 6: Jaguar monthly retail sales trend by car-type

(units) 12,000 10,000 8,000 6,000 4,000 2,000 0

Exhibit 7: Land Rover monthly retail sales trend by car-type

(units) 50,000 40,000 30,000 20,000 10,000 0

Sep-12

Feb-13

May-13

Dec-12

Jan-13

Jun-13

Jul-13

Aug-12

Mar-13

Dec-12

Jan-13

Jun-13

Aug-12

Mar-13

Nov-12

May-13

Aug-13

Sep-12

Feb-13

Oct-12

Apr-13

Jul-13

XF

New XJ

XK

F type

Defender Range Rover New Range Rover

Nov-12

Discovery Range Rover Evoque New Range Rover Sport

Freelander Range Rover Sport

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 8: JLR retail sales region wise

Aug-13 Aug-12 chg (%) Jul-13 chg (%) YTDFY14 YTDFY13 chg (%)

Asia Pacific China Region Europe North America UK Rest of the world

1,710 1,265 8,094 5,654 4,063 4,119 7,161 5,128 1,164 854 5,660 4,804

35.2 43.2 (1.4) 39.6 36.3 17.8

1,851 7,326 5,441 6,130 5,038 5,825

(7.6) 10.5 (25.3) 16.8 (76.9) (2.8)

8,977 35,847 29,454 29,486 22,594 27,824

6,514 29,493 29,005 24,593 19,989 24,006

37.8 21.5 1.5 19.9 13.0 15.9

Source: Company, Angel Research

September 13, 2013

Aug-13

Oct-12

Apr-13

Tata Motors | August 2013

Exhibit 9: JLR retail sales-mix by region

(%) 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0

22.0 3.9 23.5 18.9

14.3

17.0 18.2 16.7

15.5 17.6 16.2 22.8

17.9 12.3 19.9 20.7

14.2 18.4 16.1 21.6

20.9 5.6 20.7

16.2

17.3 17.2 17.9

16.7 17.1 16.8 21.9

17.7 17.6 16.7 20.6 21.4

18.4 15.9 19.4 17.2 23.2

20.3 4.2 25.7 14.6

34.2

33.1

13.6 17.3 24.6 18.5

28.8

12.0 20.6 19.3 21.4

25.9

16.6

23.0

24.4

24.2

17.9

15.8

21.9

29.1

Aug-12

Dec-12

Nov-12

Mar-13

May-13

Asia Pacific

China Region

Europe

North America

UK

Rest of the world

Source: Company, Angel Research

Outlook and valuation: Going ahead, we expect headwinds in the standalone

business to continue in FY2014 due to weak macro-economic environment which is expected to continue impacting domestic volumes. However, we expect JLR to sustain its strong performance driven by continued momentum in the global luxury vehicle market and aided further by the strong product launch pipeline and the success of the models launched in 4QFY2013. We expect JLR volumes to grow at a CAGR of ~13% over FY2013-15E and PAT to grow at a CAGR of ~17% during the same period. We retain our positive view on Tata Motors; however, post the sharp ~25% up move in its stock price over the last one month, the upside remains limited. We therefore recommend an Accumulate rating on the stock with a revised SOTP target price of `360.

September 13, 2013

Aug-13

Apr-13

Oct-12

Sep-12

Feb-13

Jan-13

Jun-13

Jul-13

Tata Motors | August 2013

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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Tata Motors No No No No

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Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

September 13, 2013

Tata Motors | August 2013

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September 13, 2013