Tata Motors Ltd. (TML) is doing exceptionally well when it comes to its operations in India. India’s largest CV maker has grown exponentially in FY18 while registering a stunning growth of 23% over last year and achieved a sales number of 449,433 units (including exports) for FY18. This growth was on the back of government’s push towards infrastructure development, restriction on overloading, road construction and mining activities along with increasing demand from e-commerce & FMCG application. A deeper analysis of the sales numbers reflect that CV sales is dominated by LCV which contributes around 58% of the total sales where realization is low compared to that from M&HCV. In the PV space, TML has made a brilliant comeback and reported a robust growth of 31% over last year. This was on the back of the increasing demand of Tiago & Tigor along with Nexa and Hexa gaining traction in the steadily growing UV segment. An in-depth analysis reflects that its small car segment has de-grown by 4% over the last year while utility segment has grown by 223%. So, any uncertainty or change in preference regarding utility vehicle might arrest its robust growth rate. JLR contributes around 80% of the consolidated revenues(FY17) and its performance is critically important for the success of TML. FY18 has been a lackluster year for JLR where it managed to grow only by 2%, as compared to 15%, a growth achieved in FY17. In FY18, UK and EU sales has de-grown by 13% (a drop from +16%) and 5% (a drop from +13%) respectively whereas North American sales remain flat with a meagre growth of 5% (a drop from +24%). Only Chinese market is providing JLR sales traction but it has grown by 20% in FY18, which was 32% for FY17.
Read the full report at: https://www.smifs.com/files/reports/636591238359683459_Tata%20Motors%20Ltd%20-%20Subdued%20JLR%20Performance%20Leads%20to%20Depressed%20Earnings.pdf
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