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Street cheers Tata Motors stock, as JLR plans 10 new launches in India in FY19

The aggressive launch line-up will help JLR gain the larger share of the luxury vehicle segment.

Tata Motors (TML) owned Jaguar Land Rover (JLR), announced plans to launch at least ten new products, as reported by media sources. JLR ended FY18 with 83% yoy volume growth, selling 4,609 units in India. The aggressive product action outlined for FY18 is meant to keep up the sales momentum in the new financial year and help JLR garner a larger share of the luxury car market segment in India.

Neither Tata Motors nor JLR has revealed the exact model plan for FY19; however, industry sources say that four of these launches could be from JLR’s Special Vehicles Operations (SVO) Division. JLR plans to launch a refreshed version of Range Rover Sports SVR and Range Rover SV Autobiography in Q1FY19. It will launch Jaguar F-Type SVR in India in Q2FY19 followed by Range Rover SV Coupe in Q3FY19. Other than these expected launches, JLR could also launch refreshed versions of its flagship Range Rover and Range Rover Sports models.

TML, on the consolidated level, derives ~80% of its revenue (Q3FY18) from the wholly owned subsidiary, JLR. Volumes for JLR have been weak or negative for more than a year (declined 3% yoy in Feb’18). During Q3FY18, JLR saw some weakness due to run out of two of its models Range Rover and Range Rover Sport. However, standalone business saw more than 750bps yoy EBITDA margin expansion due to market share gains in CVs.

We expect JLR volumes to improve on account of three new launches over next 12-18 months (Velar, E-Pace, I-Pace, RR/RRS refresh). Steady improvement in market share in both standalone CV and PV segments would drive 13% revenue CAGR over FY18-20E. EBITDA margin expansion of 201bps is expected over FY18-20E.

Tata Motors Ltd is currently trading at Rs358.25 up by Rs14.9 or 4.34% from its previous closing of Rs343.35 on the BSE.

The scrip opened at Rs349.85 and has touched a high and low of Rs360.20 and Rs346.10 respectively. So far 77,56,250 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs1,08,971.56cr.