Sell Tata Motors; target of Rs 200: IIFL
IIFL has downgraded its rating on Tata Motors to sell with a price target of Rs 200 in its report dated June 1, 2009.
“Tata Motors’s 4QFY09 PBT, adjusted for the exceptional items stood at a loss of Rs 1,099 million. Reported profits however were higher at Rs 5.87 billion largely due to the company adopting the revised AS-11 standard. Adjusted EBITDA margin contracted 570bps YoY to 5.4%. The company has provided no details on JLR (not even volume information). The stock has had a sharp rally in the last few weeks, far ahead of fundamentals, in our view. On our best-case scenario of CV volumes growing by 50% in FY11 and JLR reporting an EBITDA of USD 500 million, the SOTP valuation works out to Rs 320; offering no upside from current levels. We downgrade the stock to ‘SELL’ with a target price of Rs 200 based on our base case scenario of a CV volumes growing by 30% in FY11 and zero value for JLR,” says IIFL’s report.
source: Moneycontrol
Tags: brokerage calls, hot tips, iifl, IIFL recommendations, india stocks, nse bse stocks, sell rating, sell stocks, tata motors
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