JLR Backs Tata Motors’ Numbers Yet Again

Tata Motors’ wholly-owned subsidiary Jaguar Land Rover (JLR) has once again aided its performance with its excellent sales performance. The latter witnessed a growth of 17% in the month of September 2013 over that in the corresponding period of the previous year.

The global sales of Jaguar grew by 35.3% to 8462 units in September 2013 as against 6255 units sold in same month previous year. Two of its models, XF and XJ saw significant growth of 22.5% and 51% respectively on a yearly basis, which helped the company to register such an amazing performance. Its recently launched F-Type model also chipped in, with 753 units in sales.

Land Rover has also posted robust growth for the month of September 2013, witnessing 13.3% growth by selling 34719 units. Its two recently launched vehicles ‘New Range Rover Sport’ and ‘New Range Rover’ notched up a remarkable performance on a yearly basis, with registered sales of 5193 units and 3426 units respectively. The sales of Range Rover Evoque rose by 31.5% to 12370 units. However, there was a sudden decline in its previously established vehicles ‘Range Rover’ and ‘Range Rover Sport’, whose sales dipped by 99.8% and 89.7% respectively.

As regards geography, JLR had strong traction across the globe .The company has a strong grip in UK, North America and Europe, which together constitute about 60% of its sales. The UK and North America markets were stronger by 11% and 6.2% respectively, while those in Europe and Asia Pacific grew by 8.2% and 29.2% respectively. The highest sales of JLR, though, were reported in China at 45.8%. In ‘All Other Markets’, growth stood at 15.3%.

The standalone sales figures for Tata Motors continued to remain under pressure, dipping by 33% YoY. Its subsidiary JLR has always helped boost its performance since it has a strong hold in foreign markets, where the economic condition is relatively better. JLR has recently launched various models in the markets which have seen significant demand all across the globe. Hence, we remain positive on the outlook for JLR.

Presently, the stock of Tata Motors in trading at Rs 381.90, which is up 21% on a YTD basis, with a TTM price-to-earnings ratio of 11.20 x. Considering the overall scenario, this stock is certainly worth investing in.