Moneycontrol Bureau
Shares of Tata Motors rose over 1 percent intraday Wednesday riding on its December global sales data. The auto major reported 8 percent increase in global sales, including Jaguar Land Rover, at 85,742 units in December 2014.
Sales of luxury brand Jaguar Land Rover increased by 7 percent to 42,962 units in December as compared to 40,244 units in the same month last year.
Impressed by JLR sales growth, UBS has maintained a buy rating on Tata Motors but reduced target price to Rs 630 from Rs 650 per share. The brokerage expects JLR volume growth to hit double digits from Q2FY16. It is bullish on JLR margin outlook driven by strong product mix, reversal of forex headwind and starting of Chery JV production.
“While we believe our forecasts are conservative, even if we assume 200 basis points lower margins for JLR and 10 percent cut to our EV/EBITDA multiple, we see no downside to the stock on FY17 basis. Our FY16E EPS cut is driven by incorporation of slower turnaround in domestic business and losses in Chery JV. However, we expect Chery JV to be PAT positive from FY17,” UBS says in a note.
The company had sold 79,220 units in December 2013. In the passenger vehicles category, the global sales last month were at 55,145 units as against 49,721 units in December 2013, up 11 per cent, Tata Motors said in a statement.
Sales of commercial vehicles increased by 4 percent in December 2014 to 30,597 units from 29,499 units a year ago.
At 11:16 hrs Tata Motors was quoting at Rs 520.20, up Rs 0.65, or 0.13 percent on the BSE.
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