Srinivas Rao 11 April 2008· page 2
TAMO. BO ( BUY, TP Rs 920): We remain +veat currentvaluations
WHY TataMotors (TAMO) bought Jaguar & Land Rover (JLR)
Its purchase of JLR is part of TataGroup’s ongoing strategy of internationalisation.
WHERE could this lead to?
TAMO can leverage group-wide competencies in various companies such as TACO,TCS, Corus& TataTechnologies to manage JLR
HOW will it impact TAMO’sfinancials?
Headline Debt/Equity increases to 2x, interest coverage at 5x remains reasonable.Consolidation of vehicle finance biz skews leverage
We estimate proformaPBT to fall by 5-10% in FY09E
WHAT are the current valuations?
At ProformaEV/Sales of 0.5x & P/E of 6.5, TAMO is trading inline to a modest discountto global peers
It holds $400m of TataSteel. Further stake sales/demergerof vehicle finance biz areamong the options available
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