JLR retail volumes declined by 9% YoY to 128,469 units in 3QFY21.
JLR retail volumes declined by 9% year-on-year (YoY) in 3QFY21, led by volume decline across regions, except China. Even as the management has carried out a superior job in cutting fees and conserving money, volume outlook for JLR remains weak due to weak worldwide development and a weak model launch pipeline. We retain ‘sell’ but revise fair worth to Rs 155 (from Rs 135 earlier), noting price-cutting initiatives and roll-more than to March 2023E (from December 2022E earlier).
JLR retail volumes declined by 9% YoY to 128,469 units in 3QFY21. Jaguar volumes declined by 21% YoY whilst Land Rover volumes declined by only 5% YoY led by the achievement of the newly launched Defender. China volumes grew by 19% YoY to 32,668 units driven by powerful recovery in Chinese regions. UK volumes declined by 9% YoY in 3QFY21 due to issues about Brexit and a second wave of Covid-19. Other markets continued to struggle with declines in volumes in Europe (-16% YoY), North America (-17% YoY) and rest of the globe (-20% YoY) in 3QFY21.
In terms of models, new Range Rover Defender continued its uptrend (+66% QoQ) in 3QFY21. Jaguar I-Pace volumes enhanced by 69% YoY, led by powerful traction for the electric variant YoY and volumes of XE enhanced by 31% YoY in 3QFY21. In 3QFY21, mix for all-electric stood at 6.1%, PHEV stood at 5.5% and MHEV stood at 41.4%. For CY2020, share of electric automobiles mix stood at 43.3%. We anticipate JLR volumes to develop by 2% CAGR more than FY2020-23E led by recovery from FY2022E onwards. We anticipate Ebitda margin to boost to 12.8% in FY2023E from 8.7% in FY2020, led by operating leverage advantages and £6 billion of price savings below project Charge and project Charge+. The corporation expects to save the remaining £0.7 billion throughout 2HFY21E by concentrate on lowering warranty fees, minimising overhead price base and boost existing portfolio returns by lowering material price.
We also anticipate the corporation to produce FCF more than the next two quarters, led by improvement in operating functionality. However, we anticipate muted volume development more than the medium-term offered weak worldwide economy and weak model pipeline in the electric segment.
We anticipate Tata Motors’ standalone volumes to develop by 12% CAGR more than FY2020-23E led by powerful recovery in truck segment amid increasing freight prices and enhancing fleet utilization levels and 15% volume CAGR in domestic PV segment. We reckon heavy truck demand segment to show a powerful 18% CAGR more than FY2020-25E led by replacement demand and recovery in freight demand. We anticipate road freight demand to develop by 3% CAGR more than FY2020-25E led by an enhance in government and private sector investments and escalating interstate movement of goods and passengers owing to powerful development in FMCG, retail and pharmaceutical industries.