Edelweiss recommended hold rating on Tata Motors with a target price of Rs 314 in its research report dated June 25, 2018.
Edelweiss' research report on Tata Motors
Management commentary during JLR’s investor day reaffirms our core concern on FCF due to the higher-than-expected capex and lower volumes. Moreover, we perceive normalising margin in China as an incremental negative. On the positive front, JLR has effectively bridged the technological gap with peers over the past eight years, enabling it to be at the fore front of electrification and adopt flexible manufacturing.
Outlook
While we prune FY20E EPS ~3% to INR37.6, our SOTP-based TP is cut 10% to INR314 (INR351 earlier) to factor in the higher capex. Maintain ‘HOLD’.
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