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Argent Research: Merger & Acquisition Modelling - Vertical Integration Model
Argent Research: Merger & Acquisition Modelling - Vertical Integration Model
Model Content :
1) Deal Assumption page - Synergies Assumptions
2) M&A Pro Forma Model
3) Control Pannel
3) Revenue(Assumptions & Scenarios)
4) Raw FS - Acquirer Company
5) Raw FS - Target Company
6) Forecasted FS - Acquirer Company (Pro Forma Balance sheet & Cash flow statement)
7) Forecasted FS - Taget Company (Pro Forma Balance sheet & Cash flow statement)
8) Reinvestment Rate - Acquirer & Target Company
9) Risk Free Rate (Based on Credit Default Spread)
10) Comp co Beta - Acquirer Co.
11) Comp co Beta - Target Co.
12) Cost of Equity & Debt - Acquirer Co & Target Co
Rajath Madhyastha
ARGENT RESEARCH
ARGENT RESEARCH
Meger Assumptions for Tata Motors Ltd & CEAT Ltd
Transaction Inputs Scenarios
Acquirer Name Tata Motors Ltd Scenario # LIVE --> 4 2 2 3 4 5
Target Name CEAT Ltd
Acquirer Share Price 80.53 Synergies
Target Share Price 6,558.60 Revenue enhancement 15000.00 10000.00 12500.00 12500.00 15000.00 20000.00
Transaction Close Date 15-09-2023 COGS savings 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00
Financial Reporting Units in Crs. General & Admin savings 300.00 300.00 3000.00 3000.00 300.00 300.00
Currency INR
Restructuring Charges 1 Cr Synergies in Year 1 (full yr.) 30.00% 30% 30% 30% 30% 30%
Equity Issuance Fees 3.00% Synergies in Year 2 65.00% 65% 65% 65% 65% 65%
Debt Issuance Fees 3.00% Synergies in Years 3+ 100.00% 100% 100% 100% 100% 100%
Other Closing Costs ₹ 50.00
Financing
Replace Target Debt Yes Debt Tranche
Replace Acquirer Debt No Senior Debt A ₹ 4,000.00 - 2,000 2,000 4,000 5,000
Senior Debt B ₹ 3,000.00 - 2,000 2,000 3,000 4,000
Acquirer FD Shares Outstanding 386 Subordinated Debt ₹ 2,000.00 - 500 1,000 2,000 4,000
Target FD Share Outstanding 4 Interest Rate
Shares Issued 262 Senior Debt A 5.50% 5.50% 5.50% 5.50% 5.50% 5.50%
Pro Forma Shares Outstanding 648 Senior Debt B 5.75% 5.75% 5.75% 5.75% 5.75% 5.75%
Subordinated Debt 8.25% 8.25% 8.25% 8.25% 8.25% 8.25%
Share Issuance Discount 1.00%
Share Issuance Price ₹ 79.72
Transaction
Takeover Premium 12.5% 5.0% 5.0% 10.0% 12.5% 15.0%
Purchase Price Cash Consideration 30.0% 0.0% 20.0% 20.0% 30.0% 50.0%
Target Share Price ₹ 6,558.60
Takeover Premium 12.5% Sources & Uses of Cash
Offer Price ₹ 7,378.43 Sources of Cash Uses of Cash
Cash 3,169 Cash Consideration ₹ 8,953.75
Acquirer Share Price ₹ 80.53 Stock Issued 20,892 Stock Consideration ₹ 20,892.07
Share Exchange Ratio 91.623 Debt Issued 9,000 Target Debt - Replace ₹ 2,268.50
Acquirer Debt - Replace ₹ 0.00
Target Shares Outstanding 4.05 Debt Financing Fees ₹ 270.00
Offer Price ₹ 7,378.43 Equity Financing Fees ₹ 626.76
Purchase Price ₹ 29,845.82 Other Closing Costs ₹ 50.00
Target Debt ₹ 2,268.50 Total Sources 33,061 Total Uses 33,061
Target Cash ₹ 2,516.83
Enterprise Value ₹ 29,597.49
Assets :
Non-Current Asssets
PPE(Net) ₹ 15,828.1 ₹ 6,246.3 8,004 ₹ 14,250.0 ₹ 14,250.0 ₹ 30,078.14
Goodwill - - - - 12,654 ₹ 12,654.4 ₹ 12,654.40
Net Non-Current Assets ₹ 15,828.1 ₹ 6,246.3 ₹ 6,246.3 ₹ 26,904.4 ₹ 42,732.5
Current Assets -
Inventory ₹ 30,783.0 ₹ 2,198.0 3,258 ₹ 5,455.6 ₹ 5,455.6 ₹ 36,238.65
Accounts Receivable ₹ 9,181.3 ₹ 1,527.5 ₹ 1,527.5 ₹ 1,527.5 ₹ 10,708.88
Cash and Equivalents ₹ 7,564.1 ₹ 2,516.8 ₹ 2,516.8 ₹ (8,953.7) 9,000 ₹ (946.8) ₹ (2,268.5) ₹ (652.2) ₹ 6,911.91
Net Current Assets ₹ 47,528.4 ₹ 6,242.3 ₹ 6,242.3 ₹ 6,331.0 ₹ 53,859.4
Equity
Share Capital ₹ 766.0 ₹ 40.5 ₹ 40.5 ₹ (40.5) ₹ 20,892.07 ₹ 20,892.1 ₹ 21,658.09
Reserves ₹ 22,338.8 ₹ 3,640.5 ₹ 3,640.5 ₹ (3,640.5) ₹ (946.8) ₹ (946.8) ₹ 21,391.99
Shareholders Equity ₹ 23,104.8 ₹ 3,681.0 ₹ 19,945.3 ₹ 43,050.1
Liabilities
Long term Borrowings ₹ 10,256.4 ₹ 1,571.1 ₹ 1,571.1 9,000 ₹ (2,268.5) ₹ 8,302.6 ₹ 18,558.97
Short Term Borrowings ₹ 8,527.6 ₹ 697.4 ₹ 697.4 ₹ 697.4 ₹ 9,224.99
Current Tax Liabilities ₹ 97.1 ₹ 72.4 ₹ 72.4 ₹ 72.4 ₹ 169.51
Accounts Payables ₹ 30,783.0 ₹ 4,217.7 ₹ 4,217.7 ₹ 4,217.7 ₹ 35,000.70
Total Equity&Liabilities ₹ 65,090.6 ₹ 9,702.8 ₹ 9,702.8 ₹ 13,290.1 ₹ 62,954.2
ARGENT RESEARCH
Forecast Period
PRO FORMA MODEL 2024 2025 2026 2027 2028
End of Period 15-09-2023 31-03-2024 15-10-2024 15-10-2025 15-10-2026 15-10-2027
Days in the period 168 198 365 365 365 365
Fraction of year 0.46 0.54 1 1 1 1
All fig in INR Crs. Unless stated
# Assumptions
# Income Statement
Revenue ₹ 53,972.8 ₹ 1,32,522.4 ₹ 1,72,842.5 ₹ 2,21,666.2 ₹ 2,75,517.4
Cost of Goods Sold (COGS) ₹ (44,722.0) ₹ (1,03,136.4) ₹ (1,28,780.5) ₹ (1,61,508.5) ₹ (2,06,301.5)
Gross Profit ₹ 9,250.7 ₹ 29,386.0 ₹ 44,062.0 ₹ 60,157.8 ₹ 69,215.9
Expenses
SG&A Expenses ₹ (3,417.8) ₹ (8,005.1) ₹ (10,103.3) ₹ (12,732.1) ₹ (16,106.6)
Other Opearting Expenses ₹ (2,405.2) ₹ (3,074.1) ₹ (3,908.1) ₹ (4,942.4) ₹ (6,218.2)
Depreciation & Amortization ₹ (1,921.6) ₹ (4,115.8) ₹ (5,308.3) ₹ (6,814.8) ₹ (8,707.5)
Earnings berfore Interest Tax' ₹ 1,506.2 ₹ 14,190.9 ₹ 24,742.2 ₹ 35,668.4 ₹ 38,183.6
Interest ₹ (913.5) ₹ (2,152.3) ₹ (2,008.6) ₹ (1,873.7) ₹ (1,781.1)
Total Expenses ₹ (8,658.0) ₹ (17,347.4) ₹ (21,328.4) ₹ (26,363.1) ₹ (32,813.4)
Earnings Before Tax ₹ 592.7 ₹ 12,038.6 ₹ 22,733.6 ₹ 33,794.7 ₹ 36,402.5
# Supporting Schedules
Debt Schedule
Senior Debt A
Opening Balance ₹ 4,000.00 ₹ 3,600.00 ₹ 3,200.00 ₹ 2,800.00
Addition (Repayment) ₹ (400.0) ₹ (400.0) ₹ (400.0) ₹ (400.0)
Closing Balance ₹ 4,000.00 ₹ 3,600.00 ₹ 3,200.00 ₹ 2,800.00 ₹ 2,400.00
Senior Debt B
Opening Balance ₹ 3,000.00 ₹ 2,400.00 ₹ 1,800.00 ₹ 1,800.00
Addition (Repayment) ₹ (600.0) ₹ (600.0) - ₹ (600.0)
Closing Balance ₹ 3,000.00 ₹ 2,400.00 ₹ 1,800.00 ₹ 1,800.00 ₹ 1,200.00
Subordinated Debt
Opening Balance ₹ 2,000.00 ₹ 2,000.00 ₹ 2,000.00 ₹ 2,000.00
Addition (Repayment) 0 0 0 ₹ (1,000.0)
Closing Balance ₹ 2,000.00 ₹ 2,000.00 ₹ 2,000.00 ₹ 2,000.00 ₹ 1,000.00
Target Debt
Opening Balance ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00
Addition (Repayment) 0 0 0 0 0
Closing Balance ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00
Acquirer Debt
Opening Balance ₹ 18,783.96 ₹ 17,708.87 ₹ 16,741.29 ₹ 15,870.46 ₹ 15,086.72
Addition (Repayment) ₹ (1,075.1) ₹ (967.6) ₹ (870.8) ₹ (783.7) ₹ (705.4)
Closing Balance ₹ 18,783.96 ₹ 17,708.87 ₹ 16,741.29 ₹ 15,870.46 ₹ 15,086.72 ₹ 14,381.36
Total Debt
Opening Balance ₹ 18,783.96 ₹ 26,708.87 ₹ 24,741.29 ₹ 22,870.46 ₹ 21,686.72
Addition (Repayment) ₹ (1,075.1) ₹ (1,967.6) ₹ (1,870.8) ₹ (1,183.7) ₹ (2,705.4)
Closing Balance ₹ 26,708.87 ₹ 24,741.29 ₹ 22,870.46 ₹ 21,686.72 ₹ 18,981.36
# Interest Schedule
Interest Rates
Senior Debt A 5.50% 5.50% 5.50% 5.50% 5.50%
Senior Debt B 5.75% 5.75% 5.75% 5.75% 5.75%
Subordinated Debt 8.25% 8.25% 8.25% 8.25% 8.25%
Target Debt 10.11% 10.11% 10.11% 10.11% 10.11%
Acquirer Debt 9.01% 9.01% 9.01% 9.01% 9.01%
Cash and cash Equivalents ,(opening balance) ₹ 6,911.91 ₹ 21,030.60 ₹ 31,023.99 ₹ 51,390.64 ₹ 83,092.79
Increase/(decrease) during the Year ₹ 14,118.7 ₹ 9,993.4 ₹ 20,366.7 ₹ 31,702.2 ₹ 32,585.8
Cash and cash Equivalents ,(closing balance) ₹ 21,030.60 ₹ 31,023.99 ₹ 51,390.64 ₹ 83,092.79 ₹ 1,15,678.62
Forecast Period
PRO FORMA MODEL 2024 2025 2026 2027 2028
End of Period 15-09-2023 31-03-2024 31-03-2024 31-03-2024 31-03-2024 31-03-2024
# Merger Integration
Revenue
Acquirer ₹ 46,274.0 ₹ 1,10,138.2 ₹ 1,40,772.0 ₹ 1,78,947.3 ₹ 2,26,262.1
Target ₹ 7,698.8 ₹ 17,884.2 ₹ 22,320.5 ₹ 27,718.9 ₹ 34,255.3
Synergies - ₹ 4,500.0 ₹ 9,750.0 ₹ 15,000.0 ₹ 15,000.0
Total ₹ 53,972.8 ₹ 1,32,522.4 ₹ 1,72,842.5 ₹ 2,21,666.2 ₹ 2,75,517.4
SG&A Expenses
Acquirer ₹ 2,724.9 ₹ 6,485.6 ₹ 8,289.4 ₹ 10,537.4 ₹ 13,323.6
Target ₹ 692.9 ₹ 1,609.6 ₹ 2,008.8 ₹ 2,494.7 ₹ 3,083.0
Synergies ₹ (90.0) ₹ (195.0) ₹ (300.0) ₹ (300.0)
Total ₹ 3,417.8 ₹ 8,005.1 ₹ 10,103.3 ₹ 12,732.1 ₹ 16,106.6
ARGENT RESEARCH
PRO FORMA MODEL
# Discounted Cash Flow Schedule
Assumptions
Tax Rate 30.00%
WACC 13.21%
Reinvestment Rate 56.51%
Discount Rate 13.21%
Terminal Growth Rate 7.08%
Current Price 80.53
Shares Outstanding 648
Discounted Cash Flow Entry 2014 2015 2016 2017 2018 Exit
Date 15-09-2023 31-12-2014 31-12-2015 31-12-2016 31-12-2017 31-12-2018 31-12-2018
PV of FCFF 0 ₹ 1,040.0 ₹ 8,655.4 ₹ 13,330.0 ₹ 16,974.3 ₹ 16,050.9 ₹ 2,57,174.8 Terminal value 227397.91
Income Statement Assumptions Acquirer Comapany Target Company Balance Sheet Assumptions Acquirer Comapany Target Company
Merged Entity
DCF Summary
Risk Free Rate #REF! #REF! #REF!
Country Risk Premium 2.49% 2.49% 2.49%
Equity Risk Premium 8.43% 8.43% 8.43%
Comparable Comps Beta 0.96 1.22 0.96
Cost Of Debt 8.78% 8.78% 8.78%
Cost Of Equity 13.87% 16.07% 13.87%
Marginal Tax Rate 30.00% 30.00% 30.00%
Market Value of Debt 20656.55 2435.23 20656.55
Market Value Of Equity 229960.00 8934.01 229960.00
Book Value of debt 19278.50 2268.50 19278.50
Cash and Cash Equivalent 1414.63 50.24 1414.63
Weighted Avearge Cost of Capital 13.21% 13.95% 13.21%
Intrinsic Growth Rate(Median) -8.66% 2.82% -8.66%
Reinvestment Rate(Median) 56.51% 438.95% 56.51%
Terminal Growth Rate 7.08% 7.08% 7.08%
ARGENT RESEARCH
Assumptions Schedule
Acquirer Company - Tata Motors Ltd Target Company - Tata Motors Ltd
Scenario 2 Scenario 2
Live Case Scenario Forecast Live Case Scenario Forecast
All fig in Inr Crs unless stated 2024F 2025F 2026F 2027F 2028F All fig in Inr Crs unless stated 2024F 2025F 2026F 2027F 2028F
Revenue From Operations 29.26% 28.53% 27.81% 27.12% 26.44% Revenue From Operations 26.09% 25.44% 24.81% 24.19% 23.58%
Revenue From Operations 22.51% 21.94% 21.40% 20.86% 20.34% Revenue From Operations 18.64% 18.55% 18.45% 18.36% 18.27%
Revenue From Operations 29.26% 28.53% 27.81% 27.12% 26.44% Revenue From Operations 26.09% 25.96% 25.83% 25.70% 25.58%
Revenue From Operations 20.26% 19.75% 19.26% 18.77% 18.31% Revenue From Operations 15.84% 15.76% 15.68% 15.61% 15.53%
ARGENT RESEARCH
Tata Motors Ltd (Standalone)
Days in the Period 365 365 365 365 Days in the Period 365 365 365 365 365
All fig in Inr Crs unless stated
Standalone Income Statement Information Mar-20 Mar-21 Mar-22 Mar-23 income Statement Information Mar-20 Mar-21 Mar-22 Mar-23 4yrsAverage
Revenue from Opeartion ₹ 43,928.2 ₹ 30,175.0 ₹ 47,263.7 ₹ 65,757.3 Total Revenue growth - -29.24% 59.65% 37.10% 22.51%
Other Income (₹1,127.9) ₹ 112.4 ₹ 1,091.7 ₹ 538.1 Gross Margin% 7.33% 11.04% 12.28% 15.22% 11.47%
Total Revenue ₹ 42,800.3 ₹ 30,287.5 ₹ 48,355.4 ₹ 66,295.5 SG&A % Sales 7.72% 5.05% 5.52% 5.26% 5.89%
COGS (₹39,664.5) (₹26,944.4) (₹42,416.4) (₹56,202.9) Other Operating Expenses % Sales 3.76% 1.14% 1.40% 2.32% 2.16%
Gross Margin ₹ 3,135.8 ₹ 3,343.0 ₹ 5,939.0 ₹ 10,092.6 Depriciation % on PPE net (Opening Balance) 6.89% 6.69% 12.55% 8.71%
SG&A Expenses (₹3,305.4) (₹1,530.2) (₹2,669.0) (₹3,487.1) Interest rate(Avearge Debt) 17.47% 9.15% 8.79% 9.08% 9.01%
Other Operating Expenses (₹1,609.5) (₹346.0) (₹679.4) (₹1,536.3)
Depriciation/Amortization Expenses (₹3,375.3) (₹1,730.7) (₹1,760.6) (₹1,766.9) Balance Sheet Information Mar-20 Mar-21 Mar-22 Mar-23 4yrsAverage
Interest (₹1,973.0) (₹2,110.8) (₹2,121.7) (₹2,047.5) Inventory days Ratio (Days) 35 62 32 20 37
TAXES (₹162.3) (₹20.7) (₹99.2) ₹ 1,473.3 Accounts Receivable Ratio
(Days) 17 25 16 13 18
Basic Shares Outstanding 365.90 366.20 385.40 385.50 Accounts Payabale Ratio
(Days) 75 110 53 47 71
Dividend ₹ 0.0 ₹ 0.0 ₹ 0.0 ₹ 873.0 Income tax payable 19.40% 182.63% 50.08% -3.64% 62.12%
CapEx % on Revenuue 11% 6% 4% 2% 5.51%
Standalone Balance Sheet Mar-20 Mar-21 Mar-22 Mar-23 CapEx ₹ 4,632.95 ₹ 1,671.77 ₹ 1,691.92 ₹ 1,561.22
Non-Current Assets Capital Asset Turnover Ratio - PPE (net) 1.75 1.15 3.36 4.52 2.69
PPE 18870.67 ₹ 19,153.5 ₹ 11,733.4 ₹ 11,707.9 Long TermBorrowings ₹ 15,298.8 ₹ 16,920.5 ₹ 14,340.6 ₹ 10,750.9 14,327.69
Intangible Assets 5568.64 ₹ 6,402.0 ₹ 2,009.9 ₹ 2,413.2 Short Term Borrowings ₹ 6,204.7 ₹ 5,518.4 ₹ 9,188.5 ₹ 8,527.6 7,359.79
CWIP 1755.51 ₹ 1,400.8 ₹ 585.2 ₹ 575.7 Debt to Equity Ratio 1.1 1.1 1.2 0.8 ₹ 1.1
Goodwill 99.09 ₹ 99.1 - - Share Capital 719.5 765.8 765.9 766.0
Right of use Assets 669.58 ₹ 768.6 ₹ 332.5 ₹ 421.3 Shares outstanding 365.90 366.20 385.40 385.50
intangible assets under Development 2739.29 ₹ 1,605.6 ₹ 882.0 ₹ 509.3 Dividend payout % 0.00% 0.00% 0.00% 32.00% 8.00%
Investments accounted using equity method 15182.29 ₹ 15,147.3 ₹ 27,917.5 ₹ 27,976.8 Reatained Earnings - - - 68.00% 68.00%
Investments 548.57 ₹ 967.7 ₹ 1,338.9 ₹ 1,204.8
Loans and Advances 138.46 ₹ 72.4 ₹ 48.4 ₹ 114.4
Other Financial Assets 1512.96 ₹ 1,899.2 ₹ 1,992.5 ₹ 2,405.2
Deferred tax assets - - ₹ 1,477.3
Non current tax assets(net) 727.97 ₹ 715.3 ₹ 777.7 ₹ 868.2
Other non current assets 1208.08 ₹ 973.7 ₹ 662.2 ₹ 596.8
Current Assets
Inventories 3831.92 ₹ 4,551.7 ₹ 3,718.4 ₹ 3,027.9
Invetsments 885.31 ₹ 1,578.3 ₹ 5,143.0 ₹ 3,142.9
Trade receivables 1978.06 ₹ 2,087.5 ₹ 2,111.7 ₹ 2,307.7
Cash Equivalents 2145.30 ₹ 2,365.5 ₹ 2,450.2 ₹ 1,121.4
Bank balance and other 1386.69 ₹ 1,953.4 ₹ 155.2 ₹ 293.2
Loans and Advances 232.14 ₹ 184.5 ₹ 139.4 ₹ 132.2
Other Financial Assets 1546.56 ₹ 1,746.0 ₹ 809.5 ₹ 255.3
Assets classified as held for sale 191.07 ₹ 220.8 - -
Other Current Assets 1371.51 ₹ 1,166.9 ₹ 1,091.9 ₹ 1,219.1
Total Assets 62,590 65,060 63,900 61,771
Equity & LIABILITIES
Share Capital ₹ 719.5 765.81 ₹ 765.9 ₹ 766.0
Reserves ₹ 17,668.1 18,290.16 ₹ 19,178.3 ₹ 21,703.8
Non-Current Liabilities
Long term Borrowings ₹ 14,776.5 16,326.77 ₹ 14,102.7 ₹ 10,445.7
Lease Liabilities ₹ 522.2 593.74 ₹ 237.8 ₹ 305.2
Other financial liabilities ₹ 854.7 659.64 ₹ 460.4 ₹ 414.4
Provisions ₹ 1,769.7 1,371.94 ₹ 1,474.1 ₹ 1,588.7
Deferred tax Liabilities(net) ₹ 198.6 266.50 ₹ 173.7 ₹ 51.1
Other Non - Current Liabilities ₹ 269.6 533.55 ₹ 514.1 ₹ 692.0
Current Liabilities
Borrowings ₹ 6,121.4 5,421.95 ₹ 9,129.9 ₹ 8,426.7
Lease Liabilities ₹ 83.3 96.47 ₹ 58.6 ₹ 100.9
Trade Payables ₹ 8,102.3 8,115.01 ₹ 6,102.1 ₹ 7,162.6
Acceptance ₹ 2,741.7 7,873.12 ₹ 7,884.0 ₹ 5,839.9
Other financial liabilities ₹ 5,976.4 1,376.12 ₹ 1,113.3 ₹ 1,300.1
Provisions ₹ 1,406.8 1,043.54 ₹ 608.1 ₹ 408.8
Current tax Liabilities(net) ₹ 31.5 37.84 ₹ 49.7 ₹ 53.6
Other Current Liabilities ₹ 1,347.6 2,287.50 ₹ 2,047.3 ₹ 2,511.1
Total Equity and Liabilities 62,590 65,060 63,900 61,771
# Pro Forma Cash Flow Statement -Standalone Mar-20 Mar-21 Mar-22 Mar-23 2024F 2025F 2026F 2027F 2028F Stub period
168 198
Cash flow from Operating Activities
Profit Before Tax ₹ (7,127.3) ₹ (2,374.7) ₹ (1,291.7) ₹ 1,254.8 ₹ 2,345.9 ₹ 3,531.2 ₹ 4,968.9 ₹ 6,712.6 ₹ 8,823.7 ₹ 1,079.1 ₹ 1,266.8
Depreciation ₹ 3,375.3 ₹ 1,730.7 ₹ 1,760.6 ₹ 1,766.9 ₹ 1,926.4 ₹ 2,533.3 ₹ 3,308.9 ₹ 4,294.9 ₹ 5,541.6 ₹ 886.1 ₹ 1,040.3
Interest Expenses ₹ 1,973.0 ₹ 2,110.8 ₹ 2,121.7 ₹ 2,047.5 ₹ 1,926.4 ₹ 2,533.3 ₹ 3,308.9 ₹ 4,294.9 ₹ 5,541.6 ₹ 788.38 ₹ 899.34
Changes in Operating assets and Liabilities :
Inventory ₹ 730.0 ₹ (765.0) ₹ (1,201.0) ₹ 658.0 ₹ (4,355.7) ₹ (2,106.3) ₹ (2,639.5) ₹ (3,289.4) ₹ (4,076.9) ₹ (13,013.95) ₹ 8,658.20
Accounts Receivable ₹ 1,168.0 ₹ (142.0) ₹ (1,016.0) ₹ (306.0) ₹ (1,918.2) ₹ (1,205.5) ₹ (1,510.7) ₹ (1,882.6) ₹ (2,333.3) ₹ (6,873.63) ₹ 4,955.41
Accounts Payable ₹ (2,689.0) ₹ 4,965.0 ₹ 5,285.0 ₹ (957.0) ₹ 7,006.0 ₹ 4,041.9 ₹ 5,065.1 ₹ 6,312.0 ₹ 7,823.1 ₹ 23,620.41 ₹ (16,614.39)
Net Changes in Wc ₹ 732.1 ₹ 730.0 ₹ 914.8 ₹ 1,140.0 ₹ 1,413.0 ₹ 3,732.8 ₹ (3,000.8)
Income Taxes paid ₹ (1,363.0) ₹ 6,744.0 ₹ 5,437.0 ₹ (168.0) ₹ (211.1) ₹ (317.8) ₹ (447.2) ₹ (604.1) ₹ (794.1) ₹ 97.12 ₹ 114.01
Net Cash flow from operating Activities ₹ (3,933.1) ₹ 12,268.8 ₹ 11,095.6 ₹ 4,296.2 ₹ 6,719.6 ₹ 9,009.9 ₹ 12,054.4 ₹ 15,838.3 ₹ 20,525.8 ₹ 6,583.6 ₹ 319.6
Cash and cash Equivalents ,(opening balance) ₹ 1,414.6 ₹ 2,468.8 ₹ 4,640.3 ₹ 8,345.6 ₹ 13,916.0 ₹ 1,414.6 ₹ 7,564.1
Increase/(decrease) during the Year ₹ 1,054.2 ₹ 2,171.5 ₹ 3,705.3 ₹ 5,570.4 ₹ 7,847.5 ₹ 6,149.5 ₹ (4,911.7)
Cash and cash Equivalents ,(closing balance) ₹ 2,468.8 ₹ 4,640.3 ₹ 8,345.6 ₹ 13,916.0 ₹ 21,763.5 ₹ 7,564.1 ₹ 2,652.4
Acquirer Company Model - Tata Motors ltd
Supporting Schedules of Standalone Financials of Tata Motors Ltd.
Working Capital
Inventory ₹ 3,831.92 ₹ 4,551.71 ₹ 3,718.40 ₹ 3,027.90 ₹ 7,383.65 ₹ 9,489.99 ₹ 12,129.53 ₹ 15,418.89 ₹ 19,495.74 ₹ 16,041.85 ₹ 7,383.65
Accounts Payable ₹ 8,102.25 ₹ 8,115.01 ₹ 6,102.10 ₹ 7,162.60 ₹ 14,168.62 ₹ 18,210.52 ₹ 23,275.58 ₹ 29,587.59 ₹ 37,410.74 ₹ 30,783.01 ₹ 14,168.62
Accounts Receivable ₹ 1,978.06 ₹ 2,087.51 ₹ 2,111.70 ₹ 2,307.72 ₹ 4,225.93 ₹ 5,431.47 ₹ 6,942.18 ₹ 8,824.80 ₹ 11,158.13 ₹ 9,181.35 ₹ 4,225.93
Income Tax payable ₹ 31.49 ₹ 37.84 ₹ 49.67 ₹ 53.60 ₹ 211.13 ₹ 317.81 ₹ 447.20 ₹ 604.13 ₹ 794.13 ₹ 97.12 ₹ 114.01
PPE(Net ) Opening Balance ₹ 25,108.89 ₹ 26,324.01 ₹ 14,075.76 ₹ 14,542.32 ₹ 17,337.58 ₹ 20,872.94 ₹ 25,320.56 ₹ 30,885.64 ₹ 14,542.32 ₹ 15,828.14
Capital Expenditure ₹ 1,671.77 ₹ 1,691.92 ₹ 1,561.22 ₹ 4,721.66 ₹ 6,068.61 ₹ 7,756.53 ₹ 9,860.00 ₹ 12,467.04 ₹ 2,171.96 ₹ 2,549.70
Other Addtitions/(Disposal) ₹ 1,156.18 ₹ (12,316.90) ₹ 260.92
Depreciation on Existing PPE ₹ (1,730.71) ₹ (1,760.57) ₹ (1,766.86) ₹ (1,454.23) ₹ (1,454.23) ₹ (1,454.23) ₹ (1,454.23) ₹ (1,454.23)
Total Depreciation Expenses ₹ (1,730.71) ₹ (1,760.57) ₹ (1,766.86) ₹ (1,926.40) ₹ (2,533.26) ₹ (3,308.91) ₹ (4,294.91) ₹ (5,541.62) ₹ (886.14) ₹ (1,040.25)
PPE(Net ) Closing Balance ₹ 26,324.01 ₹ 14,075.76 ₹ 14,542.32 ₹ 17,337.58 ₹ 20,872.94 ₹ 25,320.56 ₹ 30,885.64 ₹ 37,811.07 ₹ 15,828.14 ₹ 17,337.58
Acquirer Company Model - Tata Motors ltd
All fig in Inr Crs unless stated
Schedule C : Debt Schedule Mar-20 Mar-21 Mar-22 Mar-23 2024F 2025F 2026F 2027F 2028F Stub period
15-09-2023 31-03-2024
Borrowings - Non Current Liabilities 168 198
Beginning of the Period ₹ 15,298.75 ₹ 16,920.51 ₹ 14,340.58 ₹ 10,750.90 ₹ 9,675.81 ₹ 8,708.23 ₹ 7,837.41 ₹ 7,053.67 ₹ 10,750.90 ₹ 10,256.36
Additions/(Repayments) ₹ 1,621.76 ₹ (2,579.93) ₹ (3,589.68) ₹ (1,075.09) ₹ (967.58) ₹ (870.82) ₹ (783.74) ₹ (705.37) ₹ (494.54) ₹ (580.55)
End of the period ₹ 16,920.51 ₹ 14,340.58 ₹ 10,750.90 ₹ 9,675.81 ₹ 8,708.23 ₹ 7,837.41 ₹ 7,053.67 ₹ 6,348.30 ₹ 10,256.36 ₹ 9,675.81
Long Term Debt Average ₹ 10,213.36 ₹ 9,192.02 ₹ 8,272.82 ₹ 7,445.54 ₹ 6,700.98 ₹ 10,503.63 ₹ 9,966.08
Short Term Debt Average ₹ 8,527.60 ₹ 8,527.60 ₹ 8,527.60 ₹ 8,527.60 ₹ 8,527.60 ₹ 8,527.60 ₹ 8,527.60
Interest Expenses ₹ 1,973.00 ₹ 2,110.83 ₹ 2,121.73 ₹ 1,687.72 ₹ 1,595.74 ₹ 1,512.96 ₹ 1,438.46 ₹ 1,371.41 ₹ 788.38 ₹ 899.34
Reserves
Opening Balance ₹ 21,703.83 ₹ 23,083.21 ₹ 25,159.56 ₹ 28,081.29 ₹ 32,028.29 ₹ 21,703.83 ₹ 22,338.76
Dividend Paid ₹ (131.37) ₹ (197.74) ₹ (278.26) ₹ (375.90) ₹ (494.12) ₹ (60.43) ₹ (70.94)
Retained Earnings ₹ 1,510.74 ₹ 2,274.09 ₹ 3,199.99 ₹ 4,322.89 ₹ 5,682.46 ₹ 695.36 ₹ 815.39
Closing Balance ₹ 23,083.21 ₹ 25,159.56 ₹ 28,081.29 ₹ 32,028.29 ₹ 37,216.63 ₹ 22,338.76 ₹ 23,083.21
Acquirer Company Model - Tata Motors ltd
All fig in Inr Crs unless stated
DCF Schedule
Free Cash Flow to Firm Mar-23 2024F 2025F 2026F 2027F 2028F
Free Cash Flow to Firm ₹ 1,306.40 ₹ 1,595.70 ₹ 2,028.23 ₹ 2,564.25 ₹ 3,224.56 ₹ 4,033.20
Equity Value
Dividend ₹ 48.5 ₹ 72.8 ₹ 12.1 ₹ 48.5 ₹ 247.75 ₹ 326.28 ₹ 422.09 ₹ 538.39 ₹ 673.04 ₹ 114.0 ₹ 133.8
No of shares Outstanding 4.05 4.05 4.05 4.05 4.05 4.05 4.05 4.05 4.05 ₹ 1.9 ₹ 2.2
Basic EPS ₹ 56.9 ₹ 106.9 ₹ 17.4 ₹ 45.1 ₹ 302.6 ₹ 398.5 ₹ 515.5 ₹ 657.6 ₹ 822.0 ₹ 139.2 ₹ 163.4
Retained Earnings 78.9% 83.2% 82.8% 73.4% 79.8% 79.8% 79.8% 79.8% 79.8% 36.7% 43.1%
Cash and cash Equivalents ,(opening balance) ₹ 53.1 ₹ 744.5 ₹ 1,969.0 ₹ 3,480.8 ₹ 5,344.6 ₹ 53.1 ₹ 2,516.8
Increase/(decrease) during the Year ₹ 691.3 ₹ 1,224.5 ₹ 1,511.8 ₹ 1,863.8 ₹ 2,302.3 ₹ 2,463.7 ₹ (987.1)
Cash and cash Equivalents ,(closing balance) ₹ 744.5 ₹ 1,969.0 ₹ 3,480.8 ₹ 5,344.6 ₹ 7,647.0 ₹ 2,516.8 ₹ 1,529.7
Target Company Model - CEAT LTD
Supporting Schedules of Standalone Financials of Tata Motors Ltd.
All fig in Inr Crs unless stated Forecast
Schedule A : Working Cpaital Mar-20 Mar-21 Mar-22 Mar-23 2024F 2025F 2026F 2027F 2028F Stub period
15-09-2023 31-03-2024
Days in perios 365 365 365 365 365 365 365 365 365 168 198
Revenue ₹ 6,786.72 ₹ 7,619.16 ₹ 9,379.93 ₹ 11,306.62 ₹ 14,256.99 ₹ 17,884.22 ₹ 22,320.54 ₹ 27,718.89 ₹ 34,255.28 ₹ 14,256.99 ₹ 14,256.99
COGS ₹ 4,835.52 ₹ 5,371.11 ₹ 7,235.99 ₹ 8,720.47 ₹ 9,979.89 ₹ 12,518.95 ₹ 15,624.38 ₹ 19,403.23 ₹ 23,978.70 ₹ 9,979.89 ₹ 9,979.89
Taxes ₹ 74.23 ₹ 51.59 ₹ 24.30 ₹ 71.75 ₹ 524.56 ₹ 690.82 ₹ 893.68 ₹ 1,139.92 ₹ 1,425.01 ₹ 524.56 ₹ 524.56
Working Capital
Inventory ₹ 911.35 ₹ 1,112.50 ₹ 1,286.51 ₹ 1,124.08 ₹ 1,749.90 ₹ 2,195.10 ₹ 2,739.62 ₹ 3,402.21 ₹ 4,204.48 ₹ 2,197.95 ₹ 1,749.90
Accounts Payable ₹ 849.66 ₹ 1,371.86 ₹ 1,665.37 ₹ 1,750.15 ₹ 2,160.03 ₹ 2,709.58 ₹ 3,381.71 ₹ 4,199.60 ₹ 5,189.91 ₹ 4,217.69 ₹ 2,160.03
Accounts Receivable ₹ 665.07 ₹ 923.42 ₹ 1,154.90 ₹ 1,301.88 ₹ 1,640.53 ₹ 2,057.91 ₹ 2,568.39 ₹ 3,189.57 ₹ 3,941.70 ₹ 1,527.53 ₹ 1,640.53
Income Tax payable ₹ 14.40 ₹ 94.22 ₹ 12.17 -₹ 2.61 ₹ 157.37 ₹ 207.25 ₹ 268.11 ₹ 341.98 ₹ 427.50 ₹ 72.39 ₹ 84.98
PPE(Net ) Opening Balance ₹ 4,159.52 ₹ 4,763.18 ₹ 5,328.94 ₹ 6,095.95 ₹ 6,422.74 ₹ 6,883.70 ₹ 7,507.11 ₹ 8,326.15 ₹ 6,095.95 ₹ 6,246.27
Capital Expenditure ₹ 1,678.00 ₹ 1,731.00 ₹ 1,574.00 ₹ 785.56 ₹ 985.42 ₹ 1,229.86 ₹ 1,527.31 ₹ 1,887.47 ₹ 361.36 ₹ 424.20
Other Addtitions/(Disposal) ₹ 1,942.03 ₹ 1,861.56 ₹ 1,871.70
Depreciation on Existing PPE ₹ (339.63) ₹ (435.20) ₹ (469.31) ₹ (406.40) ₹ (406.40) ₹ (406.40) ₹ (406.40) ₹ (406.40)
Total Depreciation Expenses ₹ (339.63) ₹ (435.20) ₹ (469.31) ₹ (458.77) ₹ (524.46) ₹ (606.45) ₹ (708.27) ₹ (875.10) ₹ (211.03) ₹ (247.73)
PPE(Net ) Closing Balance ₹ 4,763.18 ₹ 5,328.94 ₹ 6,095.95 ₹ 6,422.74 ₹ 6,883.70 ₹ 7,507.11 ₹ 8,326.15 ₹ 9,338.51 ₹ 6,246.27 ₹ 6,422.74
Target Company Model - CEAT LTD
All fig in Inr Crs unless stated
Schedule C : Debt Schedule Mar-20 Mar-21 Mar-22 Mar-23 2024F 2025F 2026F 2027F 2028F Stub period
15-09-2023 31-03-2024
Borrowings - Non Current Liabilities 168 198
Beginning of the Period ₹ 1,704.53 ₹ 1,407.94 ₹ 1,799.63 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11
Additions/(Repayments) ₹ (296.59) ₹ 391.69 ₹ (228.52) - - - - - - -
End of the period ₹ 1,407.94 ₹ 1,799.63 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11
Long Term Debt Average ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11 ₹ 1,571.11
Short Term Debt Average ₹ 697.39 ₹ 697.39 ₹ 697.39 ₹ 697.39 ₹ 697.39 ₹ 697.39 ₹ 697.39
Interest Expenses ₹ 1,973.00 ₹ 2,110.83 ₹ 2,121.73 ₹ 229.33 ₹ 229.33 ₹ 229.33 ₹ 229.33 ₹ 229.33 ₹ 93.97 ₹ 110.32
Reserves
Opening Balance ₹ 3,305.15 ₹ 4,033.61 ₹ 4,992.98 ₹ 6,234.06 ₹ 7,817.09 ₹ 3,305.15 ₹ 3,640.51
Dividend Paid ₹ (247.75) ₹ (326.28) ₹ (422.09) ₹ (538.39) ₹ (673.04) ₹ (113.96) ₹ (133.78)
Retained Earnings ₹ 976.21 ₹ 1,285.64 ₹ 1,663.17 ₹ 2,121.43 ₹ 2,651.98 ₹ 449.33 ₹ 526.89
Closing Balance ₹ 4,033.61 ₹ 4,992.98 ₹ 6,234.06 ₹ 7,817.09 ₹ 9,796.04 ₹ 3,640.51 ₹ 4,033.61
Target Company Model - CEAT LTD
All fig in Inr Crs unless stated
DCF Schedule
Free Cash Flow to Firm Mar-23 2024F 2025F 2026F 2027F 2028F
Free Cash Flow to Firm ₹ 260.98 ₹ 1,040.17 ₹ 1,331.64 ₹ 1,687.26 ₹ 2,118.93 ₹ 2,618.69
Equity Value
# Return on Equity -39.64% -12.57% -6.97% 12.14% Return on Investment 0.13% 13.66% 2.24% 5.45%
Retained earnings % 100.00% 100.00% 100.00% 68.00% Retained earnings % 78.90% 83.16% 82.80% 73.39%
Intrinsic Growth Rate -39.64% -12.57% -4.74% 8.26% Intrinsic Growth Rate 0.10% 11.36% 1.64% 4.00%
Average -12.18% Average 4.28%
Median -8.66% Median 2.82%
Reinvestment Rate Mar-20 Mar-21 Mar-22 Mar-23 Reinvestment Rate Mar-20 Mar-21 Mar-22 Mar-23
EBIT (₹5,154.3) (₹263.9) ₹ 830.1 ₹ 3,302.3 EBIT ₹ 458.2 ₹ 662.7 ₹ 301.8 ₹ 496.2
Marginal Tax Rate 30.00% 30.00% 30.00% 30.00% Marginal Tax Rate 30.00% 30.00% 30.00% 30.00%
Capital Expenditure ₹ 4,633.0 ₹ 1,671.8 ₹ 1,691.9 ₹ 1,561.2 Capital Expenditure ₹ 4,514.0 ₹ 1,678.0 ₹ 1,731.0 ₹ 1,574.0
Depreciation ₹ 3,375.3 ₹ 1,730.7 ₹ 1,760.6 ₹ 1,766.9 Depreciation (₹276.5) (₹339.6) (₹435.2) (₹469.3)
Net Capex ₹ 1,257.7 (₹58.9) (₹68.6) (₹205.6) Net Capex ₹ 4,237.5 ₹ 1,338.4 ₹ 1,295.8 ₹ 1,104.7
change in wc (₹3,296.7) (₹816.5) (₹1,203.8) ₹ 1,555.0 change in wc ₹ 285.5 ₹ 301.3 (₹196.6) ₹ 137.7
Reivestment (₹2,039.1) (₹875.4) (₹1,272.4) ₹ 1,349.3 Reivestment ₹ 4,523.0 ₹ 1,639.7 ₹ 1,099.2 ₹ 1,242.3
EBIT(1-T) -₹ 3,608.04 -₹ 184.72 ₹ 581.04 ₹ 2,311.62 EBIT(1-T) ₹ 320.75 ₹ 463.86 ₹ 211.28 ₹ 347.37
Reinvestment Rate 56.51% 473.91% -219.00% 58.37% Reinvestment Rate 14.10 3.53 5.20 3.58
Average 103.8% Average 761.3%
Median 56.51% Median 438.95%
Average Levered Beta of comparable companies 1.056 Revenue Bifurcation of Tata Motors LTD (all fig in Crs.)
Average Debt/Equity of comparable companies 0.246 Segment year Revenue weights weighted Beta
Average Tax Rate for Indian Companies 30.00% Commercial vehicles
FY2023 70,816.00 0.07 0.06
Passengers Vehicles
FY2023 5,40,965.00 0.50 0.45
# Average Unlevered beta of Comparable companies 0.90 Electric Vehicles FY2023 47,792.00 0.04 0.04
Jaguar Land Rover FY2023 3,72,217.00 0.35 0.31
Fin Services FY2023 43,338.00 0.04 0.04
# Calculation of Beta of Tata Motors Ltd Total 10,75,128.00 1 0.90
Debt 20431.86
Market Capitalization229960
Tax Rate 30.00%
Debt/Equity Ratio 0.09
Weighted Unlevered Beta 0.90