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    FUNDAMENTAL
                                                   ST CK

    Federal Bank Ltd.                                       ¡	 The automotive environment is now more
                                                               challenging with the shift to electrification,
    Buy                          Target Price Rs 472           greater geopolitical uncertainty (e.g. Brexit)
     Value Parameters                                          and softer markets in the UK and US with
                                                500570         more competitive conditions generally.
     BSE Code                       TATA MOTORS
     NSE Symbol                                             ¡	 As previously indicated, JLR expects
     CMP (As on 01st Dec, 2017)                  Rs 399        margin pressures seen in FY17, including
     Face Value                                     Rs 2       higher incentive levels and launch and
     52 Week High/Low                                          growth costs, to continue in FY18.
     Market Cap (Rs cr)                    Rs 358/552
     EPS (TTM)                                 1,38,329     ¡	 Profitability by quarter will continue to
     PE Ratio (x)                                  34.82       reflect seasonality and launch timing, with
                                                   13.63       prior model Range Rover and Range Rover
                                                               Sport running out in Q3 and a very strong
    Shareholding Pattern % (Sep’ 17)                           pipeline of exciting new products expected
      Promoters Dlls FIIs Other                                to ramp up in Q4 and beyond.

    Others                       Promoter                   Focus of standalone business is to achieve
    25.7%                        36.4%                      PAT breakeven, as a combination of sales
                                                            enhancement and rigorous cost reduction.
      DII                FII                                Some of the initiatives are as follows:
    15.3%              22.6%                                ¡	 Network expansion.
                                                            ¡	 Cost reduction initiatives in areas of
    Company Overview
    Tata Motors Ltd is one of India's largest automobile       material cost, variable costs, fixed costs, etc.
    company. They are the leader in commercial              ¡	 Improvement of supplier base.
    vehicles in each segment, and among the top three       ¡	 CV demand is expected to remain robust,
    in passenger vehicles with winning products in the
    compact, midsize car and utility vehicle segments.         led by macro factors such as government
    The company is the world's fourth largest truck            thrust on infrastructure, restriction on
    manufacturer, and the world's second largest bus           overloading and growth in e-commerce
    manufacturer.                                              segments.
    Investment Rationale
    ¡	 JLR’s strategy is to achieve sustainable profitable  Concern

       growth by investing proportionally more in new       Downside risks to our rating and price target
       products, technology and manufacturing capacity.     include:

    5 ARIHANT CAPITAL ¡ dECembER 2017                       1) Any macro shock that disrupts luxury car
                                                            growth in any global market;

                                                            2) Lower-than-anticipated earnings;

                                                            3) Slower-than-anticipated take-up for new
                                                            model launches.

                                                            Valuations

                                                            Our fair value for Tata Motors based on SOTP
                                                            is coming at Rs 472 per share. We have BUY
                                                            rating on this stock.

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