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Tata Motors Final
- 1. TATA MOTORS AmishaChaudhary David Rusirare
- 2. Recommendation BUY :Target Price 31.55 Drivers: Growth in India, Investment in Technology, Market Leader, Successful Acquisition of Jaguar and Land Rover Trading at 22.29, September 2 nd @ 1 PM
- 3. Company Overview TataMotors produces Automobiles in the following segments:
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- 5. Macro Overview: IndiaForecast for 2010 GDP growth rate raised from 8.8% in April to to 9.4% (IMF). Inflation predicted to fall between 6-6.9% by March 2011 from 10.55 (July) Currency: forecasted to depreciate, Exports will become cheaper
- 6. More on MacroExports: UAE 12.87%, US 12.59%, China 5.59% (2009) Private domestic consumption accounts for 57% of GDP in India compared with only 35% in China. External Debt: 18% of GPD, US 94% of GDP
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- 8. Auto Industry Indiais 7 th Largest Producer in the world Auto Market Competition comes from Indian manufacturers as well as from international car companies: Nissan, Honda, Toyota, Ford. We expect foreign manufacturers to increase their penetration of the Indian market following the easing of certain import restrictions
- 9. Industry Snapshot Domestically:MHCVs have grown the fastest, In Exports its LCVs and Overall its MCHVs
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- 12. The Company Tata’sMarket Share Position: Market Share Small Cars Domestic Big Cars Domestic UV LCV MHCVs TATA 12.6 22.3 13.3 56 59.9 Maruti Suzuki 52.2 31 n/a n/a n/a Hyundai Motor 21.3 10.1 n/a n/a n/a Others 13.9 24.6 8.3 15.5 4.8 Honda n/a 12 n/a n/a n/a Toyota Kirloskar n/a n/a 21.7 n/a n/a Mahindra & Mahindra n/a n/a 50.2 28.5 n/a General Motors n/a n/a 6.4 n/a n/a Ashok Leyland n/a n/a n/a n/a 26.3 Eicher Motors n/a n/a n/a n/a 8.9
- 13. TATA International Acquisitionof Land Rover and Jaguar 2008: 31% and 26% increased in Sales (July) Tata exports to the Middle East, Africa, and Europe. Tata has dealerships in 26 countries across 4 continents Electric Car to launch in Europe by 2012
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- 18. Scenario Analysis BaseCase: Tata is able to sustain growth around 27% in current economic conditions. Upside: Economy recovers, Tata shows strong growth Downside: Economy goes into deeper recession, TATA is unable to sustain growth.
- 19. Investment Risk CurrencyDevaluation of the Rupee, since TATA has significant foreign denominated debt. Rising competition Cyclical Business Sustainability of JLR Increasing Costs of Raw Materials and Regulations
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- 21. In the NewsSeptember 1, 2010 India: Tata Motors' sales rise 32% in August October 12, 2010, S &P upgrades Tata Corporate credit rating to BB- ( citing its improved capital structure after a recent share issue of USD750m) . The Aria, first crossover vehicle in India launched October 25 th (Meets European safety standards). http://www.automotiveworld.com/news/oems-and-markets/83574-india-tata-motors-sales-rise-32-in-august
- 22. Sources TATA AnnualReport Form 20-F TATA Conference Call August 2010 Bloomberg S&P Report IDFC Securities Industry Report Business Line, Yahoo News, IMF, Time, Reserve Bank of India http://www.time.com/time/world/article/0,8599,1957281,00.html http://forecasts.org/exchange-rate/india-rupee-exchange-rate.htm