INSUBCONTINENT EXCLUSIVE:
ET Intelligence Group : Jaguar Land Rover (JLR), the engine that keeps Tata Motors going, is showing signs of sputtering in key overseas
stock has lost about 20 per cent
With JLR still to regain its lustre and projected earnings per share at Tata Motors falling 38 per cent since January 2017, reasonable
16-26 per cent lower UK and Europe dispatches and moderating sales of its old models
showing on Range Rover, Range Rover Sports and Evoque
In March, the old models saw a sharp volume contraction of 23 per cent
The more worrisome part of volume growth is that ageing appears to be visible in much younger models such as F-Pace and Discovery Sport,
per cent in FY18, while retail sales to the end buyer by the dealer increased just 2 per cent
subsequent year lagged retail by 4-5 per cent.
The Street is pricing in volume growth of 6-8 per cent in FY19
The wholesale volume growth in FY18 at 6 per cent has been the lowest since 2013 and nearly half the volume growth CAGR in the past five
years.
Weak European demand for diesel vehicles and low consumer demand ahead of Brexit in the UK have hit volumes in these two geographies
that make up 40 per cent of JLR sales
China, which helped cushion the impact in the first half of FY18, is also witnessing a moderation in volumes
In the third and fourth quarters of FY17, volumes grew 15 per cent and 11 per cent, respectively, in China
In the first half, growth was 25 per cent.
After the recent correction, Tata Motors is trading at eight times its one-year forward projected
earnings, nearly on a par with its longterm average
The PE premium of Tata Motors, compared with global luxury car makers, has come down to 20 per cent from 50 per cent a year ago.
