What Is Tata Motors’s Fundamental Value Based On Expected Fiscal 2017 Results?
Tata Motors‘s (NYSE:TTM) stock has declined 16% in the last month alone on the news of the ousting of Tata Group’s holding company Tata Sons’ former chairman Cyrus Mistry, who still remains the chairman of Tata Motors, and the subsequent announcement of weak results in the second quarter of fiscal 2017 (ended September 2016). However, the turmoil at the helm of the management might not impact the operations and workings of Tata Motors, and the quarterly results also reflect short-term impacts due to revaluation of assets and liabilities and hedging losses. This means that the core performance of Tata Motors remains strong. In particular, Jaguar Land Rover continues to solidly perform this year.
Jaguar Land Rover is the most important division for Tata Motors, as it contributes over 90% of the group’s valuation as per our estimate. This is because of the higher price points, broader margin, and higher anticipated future growth in sales for this division compared to the standalone division. JLR has reported record-breaking results for the first ten months, selling 480,350 vehicles between January and October, up 23% year-over-year.
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According to our estimates, JLR will continue to witness high growth in volume sales over the next few years, especially considering the automaker has opened its Brazilian production plant, and is planning a new plant in Slovakia, which will augment its supply. Trefis estimates Jaguar’s unit sales to grow at a CAGR of 9% between fiscal 2017 (ending March 2017) and fiscal 2024, and Land Rover’s unit sales to grow at a CAGR of 10%.
Have more questions on Tata Motors? See the links below.
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- Jaguar Land Rover Steps Up Unit Sales In Crucial Markets
- How Will Tata Motors’ Valuation Be Impacted If Jaguar Land Rover Sells Fewer Cars Than Estimated?
- What Will Be The Jump In Tata Motors’ Valuation If Jaguar Land Rover Sells More Cars Than Expected?
- Where Does Jaguar Land Rover Stand Relative To The German Top 3 In Crucial Markets?
- What’s Tata Motors’s Fundamental Value Based On Expected Fiscal 2017 Results?
- How Has Tata Motors’s Revenue And EBITDA Composition Changed Over FY12-FY17?
- By What Percentage Have Tata Motors’s Revenues And EBITDA Grown Over The Last Five Years?
- What Is Tata Motors’s Revenue And EBITDA Breakdown?
- Where Will Tata Motors’s Revenue And EBITDA Growth Come From Over The Next Three Years?
- Why Jaguar Land Rover Forms More Than 90% Of Tata Motors’ Valuation
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