1、EQUITY:AUTOS&AUTO PARTSTata Motors TAMO.NS TTMT INGlobal Markets Research1 August 2024Luxury ride for JLR continues1Q margins in line;JLR performing well in tough market conditions;MHCVs may pick up with infra spend1QFY25:JLR EBIT margin ahead at 8.9%(Nomura:8.4%)Consolidated EBITDA at INR157.8bn(Bl

2、oomberg consensus/Nomura:INR150bn/INR151bn)was ahead.JLR:ASP was GBP74.4k,+4%q-q(Nomura:74.9k).EBITDA/EBIT margins were 15.8%/8.9%(Nomura:16.1%/8.4%).CV margin was ahead at 11.6%(Nomura:10.5%),while PV margin was lower at 5.7%(Nomura:6.5%),dragged by EV margin at-7.3%(vs-5.8%in Q4).Consolidated FCF

3、was INR12bn(including JLRs GBP230mn).Net auto debt increased to INR186bn(from INR160bn q-q).The CV business will be demerged from the existing company.Scheme to be completed by 1 July 2025.Management commentary JLR:Targets EBIT margin of 8.5%in FY25E(flat y-y)and 10%in FY26E;net cash in FY25E(net de

4、bt=GBP1bn in Q1).There could be supply disruption in Q2/Q3 due to disruption at an aluminium vendor.Variable marketing expenditure(VME)is not likely to rise much from 3.2%.There was a GBP60mn impact from inventory revaluation.Depreciation declined as a few Jaguar models have been discontinued.India

5、MHCVs:Rains may have affected demand in July.Positive monsoons,capex and payment release for infra projects will support demand.Margins have upside as 1Q is usually low.PVs:New launches(Curvv EV in Aug-24)and festive season should drive demand.Inventory is under control.EVs:FAME III may support flee

6、t demand.Our view:We maintain that JLRs transition to luxury will support ASP and margin expansion,underpinned by its improving mix and more premium positioning.We estimate EBIT margins at 8.5%/8.5%/10%for FY25/26/27F.As margins expand,there is strong re-rating potential as FCF yields are high at 10