CLSA upgrades Tata Motors stock

CLSA has upgraded Tata Motors to outperform from underperform and raised target price.

Written by Agencies | Mumbai | Published: January 4, 2012 11:14:21 am

CLSA has upgraded Ratan Tata-led Tata Motors to outperform from underperform and raised target price to Rs 215 from Rs 160 on substantial improvement in profit outlook for JLR.

Demand for JLR’s products (even excl ‘Evoque’) in the western world has shown remarkable resilience in 2HCY11 despite the worsening macro environment,CLSA said in a note.

The brokerage house expects Jaguar Land Rover to sustain EBITDA margins at 15 percent plus levels given the operating leverage benefits,lower input costs,improving product and regional mix in sales and cost cutting initiatives.

JLR will also benefit from a stronger USD versus the GBP and from meaningful translation gains when its GBP profits get converted into INR profits,it said.

At 10.45 a.m,the stock was up 1.73 percent at 197.20 rupees.

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