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					                                  Research Desk               Industry                             Company
                                                              Auto                                 Tata Motors Ltd.

                                                                                      Research Desk
                                                                                      Industry :
                                                                                      Company :
                           Pune e Stock Broking Pvt. Ltd.                             Tata Motors Ltd.

                                                                                     CMP : ` 1,104.9          Long-term BUY

CODES              BSE : 500570                 NSE : TATAMOTORS               Reuters : TAMO.BO                Bloomberg : TTMT@IN

  Financial Summary                                Earmarked a capex of `100 billion for growth in domestic and overseas
EPS                                      45.1      As part of its expansion plan, Tata Motors Ltd. (TML) plans to extend its
P/E                                      24.5      footprint in the domestic and in global arena as well. The company has
                                                   earmarked an investment of about ` 100 billion in the next 2-3 years on
Revenue (`bn)                         925.2        product development, facility modernization and other capex purposes.
                                                   Presently it has been seeking shareholders approval through a postal ballot to
EBITDA (`bn)                             99.1      raise upto ` 47 billion long term funds. Also, TML plans for expanding product
EBITDA Margin %                          10.5
                                                   range and increase presence in both commercial and passenger vehicle
                                                   segments. As a part of growth strategy for the domestic and international
EV/EBITDA (x)                             9.1      markets, the company plans to infuse funds for capacity enhancement, plant
                                                   renewal and modernization and other meaningful growth opportunities.
Market Cap (`bn)                      630.5        However, with recovery in the global market, there is expected to be an
Free Float Mar Cap (`bn)              423.3        increase in the commodity prices, in turn increasing the input costs. Interest
                                                   rates and liquidity may be affected as a result of inflationary pressures. The
52 week high/low               1155.75/519.5       competition in both commercial and passenger vehicle segments is expected
                                                   to intensify in FY11.
Total Debt (`bn)                      351.9

Enterprise Value (`bn)                897.1        Robust growth in CV segment on improved market sentiments
                                                   With continued improvement in road infrastructure, better lifestyle, rural
Book Value per share (`)              143.8        market growth, feasible financing, new product launches and recovery in
                                                   international business, TML was able to increase its market share in
P/BV (x)                                  7.7      commercial vehicles to 64.2% from 63.8%. Its commercial vehicle sales in the
                                                   domestic and international markets reported at 401,720 vehicles which were
      Shareholding pattern as on                   37.6% higher than the previous year. Going ahead, it plans to sell 220,000
            June 30, 2010                          units of its light trucks in FY11, triggered by a sale of ~150,000 ACE trucks and
                                                   ~70,000 Magic trucks mainly in Europe as it is a good market for the
                                                   electronic ACE truck. It also expects to launch 4-models under its premium
                                                   Prima range of trucks which would include 2-tippers, 1-tractor and 1-simple
 Other                          Promot
                                                   truck, between September and March 2011.
Investor                          ers,
   s,                           37.02%             ` Million                      FY09A         FY10A          FY11E          FY12E
                                                   Operating Income (`mn)       708,809.5     925,192.5    1,193,080.8    1,548,127.2
                                                   EBITDA (`mn)                  26,477.1      99,090.8     133,954.7      178,520.6
Public,                                            Net Profit (`mn)            (25,052.5)      25,710.6      40,986.5       61,750.1
8.33%                                                                             5,140.5       5,706.0        5,706.0        5,706.0
                                                   Share Capital (`mn)
                   Instituti                       EPS (`)                         (48.7)           45.1         71.8          108.2
                     onal                                                          (22.7)           24.5         15.4           10.2
                   Investor                        PE (x)
                      s,                           P/BV (x)                           9.6            7.7           5.7            4.2
                                                   EV/EBITDA (x)                     33.3            9.1           7.1            5.4
                                                   ROE (%)                         (42.2)           31.3         36.8           41.5
                                                   ROA %                            (1.4)           10.6         13.6           16.9
Pune e Stock Broking Pvt. Ltd.                                 For Private Circulation Only                              8th October 2010
                                            Research Desk                        Industry                              Company
                                                                                 Auto                                  Tata Motors Ltd.

                                                                                          JLR’s Volume guidance by TML for FY11
                 JLR's volumes trend ( in units)
                                                                                          Picking up sales volume & strengthening confidence in
                                                                                          market has resulted into a robust guidance for FY11 for JLR
                                                                                          segment. The Company foresees strong volume of 240,000-
                                                                                          250,000 units in FY11. During June 2010 quarter it sold
                                                                 64,550 65,700            59,200 units which is expected to decline for September
                              56,700                                                      2010 quarter due to seasonality (plant shutdown and
      60,000                                                                              holiday season in UK). It is losing ~1,000 units per month
                      44,300              57,082                                          due to engine shortage and to compensate this, Ford (its
                                                           53,950                         engine supplier) is working to resolve issues at its end. In
      40,000                                                                              order to augment this sales path, it is also focusing to
                                                                                          increase dealerships, especially in fast growing locations of
                   35,900                                                                 China and US. Further, the Company strives to maintain
      20,000                                                                              higher profitability for JLR’s products through focus on
                                                                                          reduction in variable as well as fixed cost. It has reduced its
                                                                                          break-even level to 60-65% over 80-85% earlier. Over next
             0                                                                            2-3 years, it is planning an assembly line each in China and
                                                                                          India for trap local and regional markets.

















                                                                                          Myanmar, a destination for HCV plant








                                                                                          TML entered into contract with Myanmar Automobile &
   (Source: Research Desk)                                                                Diesel Industries Ltd (MADIL) to setup a heavy truck plant of
                                                                                          around 1,000 units initially, which could go up to 5,000 units
                                                                                          later. The plant is expected to be operational in the last
                                                                                          quarter of this fiscal year, FY11. The contract will auger
                                                                                          MADIL to market and sell the trucks under the Tata Motors
                                                                                          brand. Also, the facilities that will come up at the plant
     Segment wise market share of TML in FY10                                             include a flexible chassis and frame assembly line along with
                                                                                          a cab manufacturing, painting and trimming setup area.

                                                                                          Debt slashed through effective measures
                 63.3%            64.8%
      70%                                                                                 Over the period, the Company adopted numerous effective
      60%                                                                                 & efficient measures including a rights issue, with
                               65.3%                                                      differential voting rights, early conversion of FCCBs, stake
      50% 62.0%
                                                                                          sale in group companies, etc to slash debt burden, primarily
      40%                                                  30.3%                          taken to fund JLR deal, under control. The consolidated
      30%                                                                    17.6%        loan fund reported at ` 351.9 billion in FY10, on account of
                                                                                          the $3 billion bridge loan took for the JLR acquisition, from
                                                                                          ` 349.7 billion in FY09, which inched by 0.62% only.
      10%                                                  21.6%                          Henceforth, a reduced debt burden could imply reduced
        0%                                  12.3%                            12.4%        interest expenses it could also substantially improve Tata’s
                                                                                          credit rating – thereby allowing it to raise additional capital
                                                                                          for future capex requirement at competitive rates. Tata





                                                                                          Motors’ Group net debt:equity ratio in the operations



                                                  si z


                                                                                          continues to remain high at 3.2:1, though significantly

                                                                                          bought down from 5.2:1 in FY09.
                                   FY10            FY09
                                                                                          Tata revamping Nano marketing strategies
                                                                                          Tata Motors is coming up with new marketing strategies to
   (Source: Research Desk)
                                                                                          boost the sales of its small car, Nano even after receiving
                                                                                          complaints due to the long waiting period over the product.
                                                                                          TML has recently changed its gears as far as the marketing
                                                                                          for the product is concern by introducing a free 15 day trail
                                                                                          drive campaign before buying. This mainly done to is to
                                                                                          grab new customers to its fold.

Pune e Stock Broking Pvt. Ltd.                                                       For Private Circulation Only                         8th October 2010
                               Research Desk        Industry                             Company
                                                    Auto                                 Tata Motors Ltd.

                                                               Highest ever monthly sales in July 2010 on new
           LCVs Domestic Market Share in FY10
                                                               Soaring dispatches of the Nano and strong demand for its
                                                               new launches augmented overall sales by 62% in July
                                                               2010 to 27,864 units, highest ever for it in a month, as
                                                               against 17,191 units reported in the same month a year
                                                               earlier. This was driven by 9,000 units of the Nano, 8,606
                                                               of the Indica and 7,007 of the Indigo, while combined
                                                               sales of the Sumo and Safari were 3,251 units. Improving
                                                               liquidity within the sector, new products from JLR and
                                                               other JV’s besides recovery in demand from corporate &
                                                               public sector will be the key drivers for higher growth.

                                                               Building momentum in CV Volumes (‘000 Units)

       Dividend on ordinary shares (%), EPS and
                    Payout Ratio

      60          150%   150%         150%   160%

                                             140%              Tata plans to face-lift Jaguar and Land Rover Brand
      50                                                       TML is planning to introduce new models under its Jaguar
           130%                                                and Land Rover luxury brands and also will develop some
                                                               of its cars for international markets. The company is
      40                                                       looking to introduce a station wagon, an entry-level
                                             100%              vehicle and a new roadster under the Jaguar brand. Tata

                                                               Motors has acquired U.K-based Jaguar-Land Rover (JLR)
                                                               for $2.3 billion from Ford Motor Co. in March 2008. After
      30                                     80%

                                                               struggling in the overseas market, brands' performance
                                 60%                           improved later and JLR posted a net profit of $4.7 million

                                             60%               for the FY10. This was mainly due to the fact that major
      20                               44%                     markets have started showing recovery in demand for the
            37%    35%                                         JLR brands. Also, it will focus more on emerging markets
                         33% 35%             40%               like China and the Middle East. As per the company’s
                                                               rejuvenation plans for the brand, it will restore Land
                                             20%               Rover model portfolio and develop a new Range Rover


                                                               sport-utility vehicle model, ‘Evoque’. Further, TML also
                                                               plans to make fuel-efficient and hybrid vehicles under the
       0                                     0%                Land Rover brand. The company is stressing its efforts to
            FY06 FY07 FY08 FY09 FY10                           expand its overseas market by setting up manufacturing
                                                               plants in foreign locations. Recently, it would start an
                    EPS (Reported in Rs.)                      assembly plant in South Africa for commercial vehicles.
                                                               Performance-wise, exports in commercial vehicle segment
                    Dividend Payout (%)
                                                               reported a moderate growth by 4.7% to 27,878 vehicles,
                    Dividend%                                  while its passenger vehicle exports slide 9.9% to 6,231

Pune e Stock Broking Pvt. Ltd.                       For Private Circulation Only                           8th October 2010
                                 Research Desk                     Industry                                      Company
                                                                   Auto                                          Tata Motors Ltd.

                                    Margins under pressure due to rise in raw material cost

       200,000                                                                                                                                14%
                                                                                                   11.0%                     11.2%            12%
       150,000                                                                                                                                10%


       100,000                                                                                                                                6%
                                                      3.7%                                          3.4%                          3.9%
                                                                            2.7%                                                              4%

        50,000                                                                                                                                2%







             0                                                                                                                                -2%
                         FY08                    FY09                         FY10              FY11E                     FY12E
       (50,000)                                                                                                                               -6%

                                        EBITDA                Net Profit            EBITDA Margin %               NPM%

    Company Profile
    Tata Motors Limited is the leader in commercial vehicles in each segment, and among the top three in passenger
    vehicles with winning products in the compact, midsize car and utility vehicle segments. Encompass its presence
    as the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer. Broadly,
    spread in the United Kingdom, South Korea, Thailand and Spain. In October 2009, the Company has acquired
    79% shares in Tata Hispano Motors Carrocera S.A. by way of exercise of the existing call option, through mutual
    agreement with the other share-holder, Investalia S.A., Spain. Consequently, Tata Hispano Motors Carrocera S.A.
    has become a 100% subsidiary of the Company. Further, in March 2010, the Company has sold 20% stake in
    Telco Construction Equipment Company Ltd (Telcon) to Hitachi Construction Machinery Co. Ltd. Through its
    subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment
    manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and
    factory automation solutions, high-precision tooling and plastic and electronic components for automotive and
    computer applications, and automotive retailing and service operations. Moving ahead, Tata Motor is working
    to develop variants of its Indica Vista and Indigo Manza cars and also of the Nano, the cheapest car in the world,
    for overseas markets.

Pune e Stock Broking Pvt. Ltd.                                      For Private Circulation Only                                           8th October 2010
                              Research Desk             Industry                             Company
                                                        Auto                                 Tata Motors Ltd.

                                              The Automobile Industry
   Indian Automobile Industry riding on a fast track growth:
   The Indian automotive industry is the 2nd fastest growing automotive industry in the world. The automobile sector in
   India underwent a metamorphosis as a result of the liberalization policies by the government since 1991. Now it is
   working in terms of the dynamics of an open market and therefore many joint ventures have been set up in India with
   foreign collaboration, both technical and financial with leading global manufacturers. The burgeoning middle-class
   population has allured major auto manufacturers like Volkswagen, Daimler AG, Ford, Hyundai, Honda and Toyota to
   the Indian market. President and Managing Director, General Motors China Group, Kevin E Wale pointed that India
   should be among the top ten markets for the company globally by 2011. Owing to its deep forward and backward
   linkages with other sectors in the economy, the automotive industry has a strong multiplier effect on the economy.

                                      Segment-Wise Market Share (%) in FY10

                              Two Wheelers,

                                                     3.6%        Commercial
                                                                Vehicles, 4.3%

   Phenomenal growth in FYQ1 amidst surge in loan rates and oil prices
   Indian automotive industry recorded an impressive growth of 25% in the first three months ended June 2010. The
   industry is now hoping for a good southwest monsoon and continued economic growth to sustain sales over the rest of
   the financial year. Indian Automobile sales grew an annual 30.8% in June 2010 as the industry sold 141,184 cars,
   compared with 107,948 units a year ago. The sales of trucks and buses surged an exemplary 44% at 52,211 units.
   However on the dark side, the industry might face a tough hurdle from the rising loan rates and the surge in oil prices.
   Interest rates have been tightening from now on with the increasing concern over the inflation prompting the RBI to suck
   out the liquidity from the market. Industry pandits believe on a negative correlation between auto finance rates and auto
   volume growth. Auto finance rates drifted down by 200-250bps in FY10 and therefore the industry witnessed a good
   recovery in FY10 after recouping almost 25% decline in disbursements in FY2009. Moreover, the government announced
   Petrol and Diesel price hikes by Rs.2.67/litre and Rs.2.58/litre YTD in 2010, resulting direct impact on the ownership
   cost, freight operators' profitability that adversely impacted the auto volume growth in the medium term.

   Rebound in industrial GDP growth to support truck sales, up-cycle to continue till FY12E
   There is a much-touted, conspicuous linkage between the industrial output and truck sales. The correlation between the
   industrial output growth and the growth in truck sales (r-square of 0.92) has been very strong for long now as the
   outlook on the former acts as a perfect pedestal to forecast the latter. It is valid to note that a mere growth in the
   industrial output will not necessarily result in higher truck sales as the rate of growth is the critical factor here. To
   elaborate further, truck sales in a particular year are linked to the incremental industrial output of that year over the
   previous year. Thus, if the incremental industrial output is more than the previous year, then the growth in truck sales in
   that particular year (assuming there is no regulatory changes such as overloading ban, new emission norms etc). The
   same logic can be used to explain the cyclicality in the trucking industry. Industrial GDP growth in FY09 was down to
   3.9% as against the 8.1% of the previous year which led to a 37% decline in the domestic truck sales. In line with the
   recent recovery in industrial growth numbers (industrial GDP grew at 6.7% in the H1FY10). It is expected that the trend
   to continue over FY10-12E. However, the incremental growth would be moderate as the industrial GDP growth is
   expected to be between 8-9% levels.
Pune e Stock Broking Pvt. Ltd.                            For Private Circulation Only                          8th October 2010
                                               Research Desk                                   Industry                                                                       Company
                                                                                               Auto                                                                           Tata Motors Ltd.

   Automotive Mission Plan (AMP) 2006-2016
   The reforms and policies implemented during the decade have translated into phenomenal economic growth across
   sectors including the automobile. The policy initiatives were powered by lower excise duties on smaller cars, etc. to boost
   local demand. The Excise duty has been reduced from 32% in 2002 to 10% in 2010. Further, GOI has launched the
   Automotive Mission Plan (AMP) 2006-2016, with a vision to bring forward India as the most preferred destination for
   Automobile in the world involving designing and manufacturing of automobiles and auto components. It also aims at
   increasing the output to a level of USD 145 billion accounting more than 10% of the GDP, providing additional
   employment to 25 million people by 2016. Also, the government has left no stone unturned to promote FDI in this
   industry such as automatic approval for foreign equity investment up to 100% of manufacture of automobiles and
   components, delicensing of the industry and removing all restraints on import of components.
                                                Objectives of Automotive Mission Plan 2006-2016

         Increase turnover to                                                  Increase export                                                            Provide employment to
         $145 billion by 2016                                                  revenue to $ 35 billion                                                    additional 25 million
         from $ 35 billion at                                                  by 2016 from $ 4.1                                                         people by 2016
         present                                                               billion at present

   India pool global auto manufacturers as the favorite destination
   In recent times, India has emerged as one of the favorite investment destinations for automotive manufacturers. Mercedes-
   Benz is planning to launch over-dimensional-cargo (ODC) vehicles and long-haulage trucks in India with a carrying
   capacity of 240 tonnes. Japanese major Nissan has taken a strong decision to shift the entire production facility of its small
   car, Micra, from the UK to India. With an investment plan of US$ 412.2 million, Nissan plans to manufacture four more
   models in India after production of the Micra begins here. Toyota Motors (TMC) is planning to capitalise on the proposed
   Indo-Thai free trade agreement (FTA) to make India a hub for small cars to be exported to its global markets. Toyota has
   embarked on investing US$ 657.1 million during 2008-11 to set up a second plant in Bangalore to manufacture 200,000 cars
   from the current 80,000 units. Hyundai has already made India as its global hub for manufacturing compact cars. It is
   further planning to invest US$ 1 billion in its second plant in Chennai by 2013. Besides, it is investing US$ 40 million in
   R&D facility in Hyderabad. The U.S. giant, General Motors has already invested US$ 1 billion into its Indian operations.

                                                       Domestic segments sales growth trend in (%)
















                        FY05                            FY06                           FY07                             FY08                           FY09                               FY10

                                                PV         Commercial Vehicles                         Three Wheelers                  Two Wheelers

   Investment in urban infrastructure to spur bus sales
   The government has taken significant steps to upgrade the urban infrastructure and mass transport such as Jawaharlal
   Nehru National Urban Renewal Mission (JNNURM) scheme and also develop the highways to match the international
   standards under National Highways Development Project (NHDP) – a move that will lead to higher sale of buses. The
   increasing passenger preference for comfort and quality in travel is the icing on the cake as the demand to replace
   conventional buses with the high-end ones is growing. The NHAI is expected to complete the up-gradation of close to
   22,000 km of national highway in the next few years. It is expected bus sales to grow at 15% each in FY11E and FY12E.

Pune e Stock Broking Pvt. Ltd.                                                                         For Private Circulation Only                                                                               8th October 2010
                              Research Desk         Industry                             Company
                                                    Auto                                 Tata Motors Ltd.

       Quarterly Result (Consolidated)

      `million                                                   Q1FY11                Q1FY10                  %YOY

      Operating Income                                          270,555.7            164,729.7                   64.2

      Other Income                                                 345.5                3,210.7                 (89.2)

      Total Income                                              270,901.2            167,940.4                   61.3

      Operating Expenses                                        232,001.8            159,700.7                   45.3

      EBITDA                                                     38,899.4               8,239.7                 372.1

      EBITDA Margin (%)                                              14.4                   4.9               945bps
      Depreciation                                               10,115.4               8,442.3                  19.8

      EBIT                                                      28784.00               (202.60)             (14,307.3)

      EBIT Margin (%)                                              10.63                  (0.12)             1075bps

      Interest                                                      5616                 5835.2                  (3.8)

      Exceptional Items                                           (413.6)               3,339.2                (112.4)

      PBT                                                        22,754.4              (2,698.6)               (943.2)

      Tax                                                         2,960.2                 642.6                 360.7

      PAT                                                        19,794.2              (3,341.2)               (692.4)

      Share of Minority Interest                                   (62.7)                  50.8                (223.4)

      Profit in Associate Companies                                155.8                    2.6               5,892.3

      Net Profit                                                 19,887.3              (3,287.8)               (704.9)

      NPM (%)                                                         7.3                  (2.0)              930bps

       Swung in revenue during Y-O-Y (` in million)                 Better quarterly margins in Y-O-Y values in (%)

       35,000                                                        16%
       30,000                                                        14%
       25,000                                                        12%
       20,000                                                        10%
       15,000                                                         8%
       10,000                                                         6%
        5,000                                      EBITDA             4%
            0                                                         2%                                    EBITDA Margin
       (5,000)                                     Net Profit         0%
                     Q1FY10           Q1FY11                         -2%                                 NPM
                                                                              Q1FY10         Q1FY11
                     Net Profit    EBIT   EBITDA
                                                                            NPM   EBIT Margin      EBITDA Margin

Pune e Stock Broking Pvt. Ltd.                       For Private Circulation Only                            8th October 2010
                                Research Desk   Industry                        Company
                                                Auto                            Tata Motors Ltd.

     Balance Sheet (Consolidated)

     (` million)                                   FY09A             FY10A           FY11E             FY12E

     Equity Capital                                5,140.5           5,706.0        5,706.0           5,706.0

     Reserves & Surplus                           54,265.9         76,358.8       105,569.6         143,024.4

     Shareholders' Fund                           59,406.4         82,064.8       111,275.6         148,730.4

     Minority Interest                             4,030.3           2,135.1        2,189.5           2,329.6

     Loans fund                                 349,738.5         351,923.6       364,412.3         380,988.3

     Foreign currency translation                          -         1,911.5        1,966.0           2,025.2

     Deferred Tax (Liability)                      9,496.5         15,796.0        20,937.1          25,448.4

     Capital Employed                           422,671.7         453,831.0       500,780.5         559,521.9

     Gross fixed assets                         584,693.8         648,518.3       692,743.9         774,002.6

     Less: accumulated depreciation             332,690.5         344,135.2       394,171.0         440,407.1

     Net Fixed assets                           252,003.3         304,383.1       298,573.0         333,595.5

     Capital Work in Progress                   105,330.0          80,680.2       124,794.8         139,433.1

     Total of Fixed Assets                      357,333.3         385,063.3       423,367.7         473,028.6

     Goodwill                                     37,186.5         34,228.7        44,058.5          49,226.5

     Investments                                  12,574.0         22,191.2        23,458.5          26,210.2

     Deferred Tax (Assets)                         2,694.4           4,259.7        3,192.3           3,566.8

     Foreign currency translation                  6,364.8                 -              -                 -

     Net Current Assets                            5,657.9           8,088.1        6,703.5           7,489.8

     Misc Exp                                       860.8                  -              -                 -

     Capital Deployed                           422,671.7         453,831.0       500,780.5         559,521.9

Pune e Stock Broking Pvt. Ltd.                   For Private Circulation Only                      8th October 2010
                                Research Desk   Industry                         Company
                                                Auto                             Tata Motors Ltd.

    Profit & Loss Account (Consolidated)

    (` million)                                    FY09A              FY10A           FY11E              FY12E

    Operating Income                            708,809.5          925,192.5     1,193,080.8        1,548,127.2

    % Growth                                         98.8               30.5            29.0               29.8

    Other Income                                  7,989.6           17,931.2        29,609.0           51,598.3

    Total Income                                716,799.1          943,123.7     1,222,689.8        1,599,725.5

    Expenses                                    686,844.5          839,050.9     1,081,997.0        1,410,744.2

    Product Development Exp                       3,477.5            4,982.0         6,738.1           10,460.8

    Total Expenses                              690,322.0          844,032.9     1,088,735.1        1,421,205.0

    % of Sales                                       96.9               90.7            90.7               91.1

    EBITDA                                       26,477.1           99,090.8       133,954.7          178,520.6

    % Growth                                        (40.5)             274.3            35.2               33.3

    EBITDA Margin %                                   3.7               10.5            11.0               11.2

    Deprecation/Amortisation                     25,067.7           38,871.3        50,126.4           65,043.5

    EBIT                                          1,409.4           60,219.5        83,828.2          113,477.1

    % Growth                                        (96.2)           4,172.7            39.2               35.4

    EBIT Margin %                                     0.2                6.4             6.9                7.1

    Interest                                     19,309.0           22,397.1        27,223.0           32,974.0

    Exceptional items                             3,392.9            2,596.0         3,347.7            4,343.9

    Profit before Tax                           (21,292.5)          35,226.4        53,257.6           76,159.2

    Tax                                             3,358           10,057.5        12,969.6           15,315.6

    Transfer to minority interest                   114.8             (303.3)        (391.1)             (507.5)

    Profit/loss of associates                      (517.3)             845.0         1,089.7            1,413.9

    Net Profit                                  (25,052.5)          25,710.6        40,986.5           61,750.1

    % Growth                                       (215.6)            (202.6)           59.4               50.7

    NPM%                                             (3.5)               2.7             3.4                3.9

Pune e Stock Broking Pvt. Ltd.                    For Private Circulation Only                      8th October 2010
                              Research Desk            Industry                              Company
                                                       Auto                                  Tata Motors Ltd.

    Key Ratios & Valuations

                                                              FY09A               FY10A                FY11E           FY12E

     EBITDA Margin (%)                                             3.7               10.5                11.0            11.2

     EBIT Margin (%)                                               0.2                6.4                 6.9             7.1

     NPM (%)                                                    (3.5)                 2.7                 3.4             3.9

     ROCE (%)                                                      0.3               13.3                16.7            20.3

     ROE (%)                                                   (42.2)                31.3                36.8            41.5

     ROA (%)                                                    (1.4)                10.6                13.6            16.9

     Net Debt/Equity                                               5.2                3.2                 2.8             2.2

     Interest Coverage (x)                                         0.1                2.7                 3.1             3.4

     EPS                                                       (48.7)              45.06               71.83           108.2

     Cash EPS                                                     45.0             156.0               212.0           286.0

     P/E (x)                                                   (22.7)                24.5                15.4            10.2

     BVPS                                                      115.6               143.8               195.0           260.7

     P/BVPS (x)                                                    9.6                7.7                 5.7             4.2

     EV/Operating Income (x)                                       1.2                1.0                 0.8             0.6

     EV/EBITDA (x)                                                33.3                9.1                 7.1             5.4

     EV/EBIT (x)                                               624.8                 14.9                11.3             8.5

  Tata Motor has always commanded premium valuations, thanks to its world wide presence, clean balance sheet and a good
  market positioning. While these arguments still hold good, what has added sheen to its investment appeal is a slew of new
  launches that aims for high-growth potential. JLR and Nano are recent launches that, over the years, hold potential to
  become big revenue spinners. Market conditions remained turbulent during the period, however the Group continued to
  respond proactively in adjusting staffing levels in line with prospective demand and delivering cost saving efficiencies. The
  Group's financial position remains good, with ongoing focus on working capital delivering a strong cash flow performance
  in the period. Further the valuations look very attractive at the current market price ` 1,104.9 and therefore we rate the stock
  as ‘BUY’. At the current market price, the stock is trading at a P/E of 24.5x on FY10 EPS of ` 45.1 and 15.4x on FY11E EPS of `

Pune e Stock Broking Pvt. Ltd.                           For Private Circulation Only                            8th October 2010
                                   Research Desk                 Industry                                     Company
                                                                 Auto                                         Tata Motors Ltd.

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Pune e Stock Broking Pvt. Ltd.                                     For Private Circulation Only                                       8th October 2010

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