India Research

Stock Data

Tata Motors
No. of shares : 385m
Market cap : Rs 208.2bn
52 week high/low : Rs 840 / Rs 523
Avg. daily vol. (6mth) : 1.1mn shares
Bloomberg code : TTMT IB
Reuters code : TELC.BO
Rs 540
Shareholding (%) Mar-08 QoQ chg
Relative to Sector: Neutral Target Price: Rs 613
Promoters : 33.4 0.0
FIIs : 17.0 (0.5) Potential Upside: 14%
MFs / UTI : 2.6 (0.6)
Banks / FIs : 14.8 1.0
Others : 32.2 0.2
Relative Performance
180

140 Bet shifts to Land Rover…

100

60 (From trucks in India to SUVs in America)

Apr-07 Oct-07 Apr-08
Sensex Tata Motors

Source: ENAM Research, Bloomberg

Financial summary – Consolidated (Including JLR)

Sales EBITDA Adj. PAT EPS Change P/E RoE RoCE EV/EBITDA
Y/E Mar
(Rs mn) (Rs mn) (Rs mn) (Rs.) (YoY %) (x) (%) (%) (x)
FY07 320,996 37,040 21,380 50.2 - - - - -
FY08 356,515 42,063 20,301 47.7 (5.0) - - - -
FY09E 963,975 48,534 11,688 27.4 (42.4) 19.7 6.1 5.8 7.5
FY10E 1,036,530 58,549 15,466 36.3 32.3 14.9 10.3 7.2 6.2
Source: Company, ENAM estimates. Note: JLR estimates consolidated from FY09 onwards

Sahil Kedia
sahil.kedia@enam.com (+91 22 6754 7621) June 7, 2008
1
Table of contents
Slide No.

 Investment Summary 3
„ Impact of JLR: Funding & valuation 4
„ What can swing TAMO? 6
„ TAMO: Long term efforts remain intact 7

 Jaguar Land Rover (JLR) 8

„ Land Rover 10
„ Jaguar: The trouble maker 11
„ Concerns 14

 Existing Businesses 15
„ M&HCV 19
„ Passenger cars 24
„ Subsidiaries and exports 31

 Financials 35

 Valuation Comparison 42

2
Investment summary
 JLR a USD 2.3bn Catch? FY10 Contribution: Bet now on JLR…
„ JLR to add USD 15bn in revenues of which LR contributes ~65% 100
%
„ 60% of revenues for TAMO will accrue from outside India, and
80
we believe that TAMO’s valuations hinge on a turnaround in JLR
60
 Volumes for Land Rover hold the key
40 58
„ LR volumes are expected to be under pressure in FY09 as 23

customer preferences are changing with surging oil prices. 20

„ With LR volumes down by 23% in USA and 13% in Europe YTD, 0
we believe JLR financials could deteriorate in FY09 despite Sales EBITDA
Jaguar volumes doing well. Subs JLR Tata Motors

 Tough times back home Milestones to watch

„ High interest rates + inflation + fuel costs rule out the possibility
of an early recovery in volumes
FY11 „ JLR launches to meet
revised EU emission norms
 Short term valuations will be capped by sizeable
Success of Nano
dilution (~40%) and low volume visibility for JLR FY10
„
„ CV cycle recovery

 Outlook „ Higher than expected volumes from Jaguar?

„ On a consolidated basis, we believe that earnings will be under „ Equity dilution
FY09
„ Slowdown in global SUV sales
pressure in FY09 and hence a P/E re-rating is unlikely
„ Slowdown in CV cycle
„ We maintain our sector Neutral with a target price of 613
Source: Company, ENAM Estimates

3
Structure and funding
SPV structure Earnings composition
SPV Structure Revenues
600 (Rs bn)
Tata Motors
400
100%
As
Asaaresult
result 200
SPV 1 (Singapore)
0
ƒ ƒLeverage
Leverage FY08 FY09 FY10
USD 0.7bn remains
towards Wcap
remains Standalone Subsidiaries JLR
SPV 2 (UK)
healthy
healthyatat
100% + 0.6x
0.6xononaa 40
EBITDA
(Rs bn)
JLR USD 2.3bn paid consolidated
consolidated 30
to Ford
basis
basis 20

=
10
ƒ ƒExpected
Expectedtoto
0
raise
raisedebt
debtatat FY08 FY09 FY10
USD 3bn bridge loan
JLR
JLRlevel
level Standalone Subsidiaries JLR

PAT
20
(Rs bn)
15
USD 1.8bn through USD 500mn equity ~USD 700mn
rights issue + offer overseas + balance through debt
10
5
Rights assumed 0
at 35% discount (5)

Rs 22bn Rights issue Rs 20bn Rights issue Rs 30bn Rights issue to CMP (Rs 350) (10)
implying a 2:1 FY08 FY09 FY10
of equity shares of ‘A’ equity shares of 5yr 0.5% CPS
ratio Standalone Subsidiaries JLR

Source: Company, ENAM Estimates

Potential dilution of ~40-50% expected
4
Possible valuations
EV/EBITDA:
 Assumptions
Particulars (Rs mn) FY09
„ With the financials of JLR still unclear we have valued the
Conso Revenues 963,975
consolidated entity using both EV/EBITDA and SOTP on a FY09 EBITDA 48,534
basis. Target EV/EBITDA (x) 6.0
Net Debt 27,625
M Cap 263,582
 Jaguar – Land Rover Target Price 619
„ We expect volumes for Jaguar to improve 20% YoY, and Land TP-Post Rights 396
Rover to decline 10% YoY.
SOTP
„ We expect JLR to clock an annual EBITDA of USD 225mn (~3%
Particulars (Rs mn) FY09
margin) in CY08 after adjusting for R&D and royalty expenses. TAMO Revenues 305,947
` As R&D costs have been historically billed to Ford, we believe TAMO PAT 15,243
EBITDA margins will be lower going ahead Target PE 11
Tata-Standalone (a) 167,678
„ We believe that JLR will not attract any taxation in the first few
years, due to the USD 1.1bn capital advances from Ford. JLR Revenues 568,255
JLR PAT 8,988
 Domestic operations Target PE 5

„ Our estimates do not take any impact of the Nano into account.
Value of JLR (b) 7,291

 We have assumed rights issue at a 2:1 ratio Value of Subsidiaries(c) 86,315

„ We have assumed rights at Rs 350, implying a ~35% discount to
Total SOTP - Value 261,284
CMP
Target Price 613
TP-Post Rights Issue 393
Source: Company, ENAM Estimates

We expect valuations to remain range bound until clarity on JLR emerges

5
JLR can swing TAMO
 JLR holds the key to TAMO’s prospects  TAMO’s consolidated valuations are
Volumes for JLR, especially Land Rover hold the key
„
largely dependent on JLR’s
to a P/E re-rating of TAMO
performance
 Land Rover more important than Jaguar EBITDA (Rs mn) Jaguar Volumes (%)
Conso 66,534 69,558 72,582 75,606 78,631
„ Land rover contributes ~65%+ to JLR’s total 10.0 15.0 20.0 25.0 30.0
revenues of USD 15bn. We estimate LR to be 181,116 (20.00) 36,179 37,446 38,714 39,981 41,248

Volumes (%)
Land Rover
192,436 (15.00) 41,089 42,357 43,624 44,891 46,159
profitable at the EBITDA level. 203,756 (10.00) 46,000 47,267 48,534 49,802 51,069
„ We expect volumes for LR to be under 215,075 (5.00) 50,910 52,177 53,445 54,712 55,980
226,395 - 55,821 57,088 58,355 59,623 60,890
pressure in USA & UK due to a shift in
consumer preferences on account of high oil TP (Rs) Jaguar Volumes (%)
Conso 66,534 69,558 72,582 75,606 78,631
prices. 10.0 15.0 20.0 25.0 30.0
181,116 (20.00) 468 483 498 513 528

Volumes (%)
Revenues (USD mn) Jaguar Volumes (%)

Land Rover
JLR 66,534 69,558 72,582 75,606 78,631 192,436 (15.00) 526 541 556 571 586
10.0 15.0 20.0 25.0 30.0 203,756 (10.00) 584 599 613 628 643
181,116 (20.00) 12,729 12,880 13,032 13,184 13,335 215,075 (5.00) 641 656 671 686 701
Volumes (%)
Land Rover

192,436 (15.00) 13,316 13,468 13,619 13,771 13,922 226,395 - 699 714 729 744 758
203,756 (10.00) 13,903 14,055 14,206 14,358 14,509 Source: Company, ENAM Research
215,075 (5.00) 14,490 14,642 14,794 14,945 15,097
226,395 - 15,078 15,229 15,381 15,532 15,684
„ Assumed at an EV/EBITDA target of 6x on an
EBITDA (USD mn) Jaguar Volumes (%) FY09E basis
JLR 66,534 69,558 72,582 75,606 78,631
10.0 15.0 20.0 25.0 30.0 „ P/E re-rating expected as clarity on the
181,116 (20.00) (84) (53) (21) 11 43 profitability of JLR emerges
Volumes (%)
Land Rover

192,436 (15.00) 39 70 102 134 165

203,756 (10.00) 161 193 225 256 288
215,075 (5.00) 284 316 347 379 411
226,395 - 407 439 470 502 534

6
 Long term efforts remain intact
Existing New
Product Partners Remarks
Geographies Geographies
CV (Goods)

„ India, Russia „ USA „ IVECO, Italy (FIAT Subsidiary) „ Expected to launch Global truck platform for
„ S. Africa „ EU „ TDCV, Korea – 100% developed markets by Q3FY09
„ Korea, Middle ownership (Korea’s #2 truck)
East etc.

India, Russia Latin America Hispano Carrocera, Spain Recently launched Marco-polo bus range in
(Passenger)

„ „ „ „
„ S. Africa „ Europe 21% stake (Bus & Coach India
Korea, Middle manufacturer) Is expected to start assembly operations in
CV

„ „
East etc. „ Marco Polo, Brazil 51:49 JV Latin America & Africa.
(Global leader in Bus Body „ New plant at Dharwad in Karnataka expected to
Building) start operations by H2FY09

„ India „ Fiat 50:50 JV (To manufacture „ Expansion of production and engines at Ranjangaon
(Small)

Africa cars and engines in India) New Indica - II & Nano to be launched in
Cars

„ „
„ Europe - Q3FY09
„ Expect 2-3 models from Tata-Fiat by FY10

„ US „ China „ Jaguar & Land Rover „ Has launched XF in EU and USA in March.
(Big)
Cars

„ Europe „ India (Acquired from Ford for USD „ Allows TAMO to access world-class power-train and
2.3bn) chassis technology

„ India „ Africa „ Expected to launch 1-tonne ACE for exports

Europe - by June-08
LCV

„
„ CNG variant to be launched by FY10
„ Capacity expansion at Uttarkhand facility
Pick-ups

„ India „ Thailand „ Thonburi, Thailand 70:30 JV „ Recently Launched Xenon in Thailand (Largest
UV &

„ Europe (To start local assembly in market for pick-ups)

„ S.E.Asia Thailand) „ Has licensed Fiat to manufacture pick-ups at
„ Latin America its Cordoba Plant in Argentina from FY09

Plus, engineering and design capabilities of TACO and INCAT

7
 JLR
TAMO finally bells the cat…

8
JLR: A USD 2.3bn catch?
 TAMO acquired JLR for USD 2.3bn
„ JLR has a turnover of USD 15bn (~2x of TAMO revenues in FY08), with a product profile which is completely different
to TAMO’s existing line of business
„ There are no apparent short term visible synergies between the two companies
„ An expected >60% of revenues will accrue from the developed markets where TAMO has very little experience

 What JLR adds to TAMO

„ With JLR in the bag, TAMO might be able to shrug the image of a truck manufacturer
„ JLR brings world class power train and chassis knowledge, which can be leveraged to good use by TAMO in the future

 Why did Ford sell?

„ Ford needs to concentrate on its existing core business and does not want to spend on “expensive hobbies” anymore
„ Ford acquired these businesses in a dilapidated state and has invested an estimated ~10bn to improve the
manufacturing facilities
„ The net consideration from the sale of USD 1.7bn will not materially affect Ford’s already troubled state

 Tough times ahead…

„ With the US economy showing signs of a slowdown in 2008, the demand for luxury cars and SUVs is expected to slow
„ Although the company has indicated current volumes are positive for both Jaguar and Land Rover, we
believe that CY08 volumes would be under pressure
„ Meeting high R&D expenditure, due to the change in emission norms in the EU in 2012, will be difficult.

 TAMO doesn’t have cash on the B/S to burn for R&D, unlike other global auto majors

JLR - a make or break for TAMO

9
Land Rover: The profit center
 Land Rover: The British 4x4! Volumes and global presence
250,000 200
„ Has a portfolio of 5 brands including the successful Range (Nos.)
Rover series with competition mainly from Toyota, 200,000
150
Mitsubishi, GM etc.
150,000
„ In contrast to the struggling Jaguar, LR achieved its
100
highest ever volumes of 226,395 units in 2007. 100,000
„ LR’s global presence has also been increasing with the 50
50,000
success of the Rover-Sport.
0 0
 Acquired by Ford in 2000 2003 2004 2005 2006 2007
„ Ford acquired LR from BMW in 2000, and has been Volumes (LHS) No of markets (RHS)
working with Jaguar for sharing of common technologies
such as engines and manufacturing facilities.
Regional distribution of volumes (%)
 Land Rover remains a profit making company 100

„ LR is estimated to clock ~USD 10-11bn in revenues, and is 80

expected to be profit making.
60
 Plagued with quality issues 40
„ LR has lost out on the race for quality to the Japanese,
and has attracted criticism for its high emission levels. 20
„ Significant investments will be required to meet emission 0
norm changes in Europe in 2012. (estimated R&D cost in 2003 2004 2005 2006 2007
CY07 for LR was USD 400mn).
Europe America Asia-Pacific ROW
„ LR has displayed an impressive pipeline of products
including the LRX concept car, due in 2012. Source: Ford, ENAM Research

10
Jaguar: The trouble maker?
 A premium luxury car brand Volumes and global presence
„ Has a portfolio of 5 models including its flagship model the 150,000 120
(No.s) (No.s)
XJ manufactured at three plants in UK. 120,000 100
„ Main competitors include BMW, Mercedes Benz, Audi, 80
Porsche etc. 90,000
60
60,000
 Acquired by Ford in 1989 for USD 2.5bn 40
„ Acquired to compete against Toyota’s Lexus brand 30,000 20
„ Ford is believed to have invested over USD 10bn in the
0 0
company to improve the production facilities. 2003 2004 2005 2006 2007
Volumes (LHS) No. of markets (RHS)
 Jaguar has been struggling to find a mass
market model over the last few years
„ Jaguar is in the process of changing the complete product Regional distribution of volumes (%)
profile, starting with the launch of the XF. 100

 Exciting possibilities with XF 80

„ Jaguar’s latest offering launched in Mar 2008, has created 60
a buzz amongst car experts with over 18,000 pre-bookings
„ Given the German and Japanese dominance in this 40
segment, we believe Jaguar volumes could hit a “glass- 20
ceiling”
0
2003 2004 2005 2006 2007
Europe America Asia-Pacific ROW

Source: Ford, ENAM Research

11
Poised to turnaround?
 Jaguar XF: The savior? Product portfolio overhaul
„ XF was launched in Mar 2008 in USA and UK to Model Volume in Change (Model + Year)
replace the S-Type. CY07 (No.s)
X-Type 23,331 To be phased out in 2010, replacement
„ It has received a number of accolades from across
S-Type 14,710 Replaced by XF in 2008
the world and was awarded “Car of the year” by XJ 10,455 New version expected in 2010
‘What Car’ magazine in Europe for 2008. XFR/ XKR N.A. Supercharged version of XF and XK to
be launched in 2009
XF Coupe N.A. Expected to be launched in 2010
 XF has already received 18,000 pre- F-type N.A. Expected to be launched in 2011-12
bookings in US and UK Source: Company, ENAM Research

 Product portfolio facelift Sensitivity: Impact of XF

„ Jaguar has lacked a high volume luxury car akin to (USD mn) Volumes (No.s)
BMW-3 series Sales 20,000 25,000 30,000 35,000 45,000
` Earlier attempts with the X-type built on a Ford- 47,025 941 1,176 1,411 1,646 2,116

Realisation
Mondeo platform have not yielded results 48,510 970 1,213 1,455 1,698 2,183

(USD)
„ With a product overhaul expected in the coming 49,500 990 1,238 1,485 1,733 2,228
50,490 1,010 1,262 1,515 1,767 2,272
years, outlook for Jaguar is positive
51,500 1,030 1,287 1,545 1,802 2,317
„ As per industry experts Jaguar needs to clock annual
volumes of 100k for operations to turn around. (USD mn) Volumes (No.s)
EBITDA 20,000 25,000 30,000 35,000 45,000
 However, R&D costs to escalate 4% 40 50 59 69 89

Margin (%)
EBITDA
5% 50 62 74 87 111
„ Product overhaul will require an increased spend on
5% 50 62 74 87 111
R&D over the next three-four years
8% 79 99 119 139 178
„ We estimate that Jaguar will require in excess of USD 10% 99 124 149 173 223
1bn towards R&D costs in the coming 3-4 years Source: ENAM Research

12
Scale of operation needs to ramp up
Model wise volumes in 2007 Product overhaul
JLR BMW Merc Audi Jaguar: Product pipeline
X-Type 23,331 1 Series 165,803 A/B Class 275,100 A3 230,849
Model Change (Model + Year)
S-Type 14,710 3 Series 555,219 C-Class 386,500 A4 322,517
XJ 10,455 5 Series 230,845 E-Class 234,600 A6 234,215
S-Type Replaced by XF in 2008
XK 11,989 7 Series 44,421 S-Class 85,500 A8 21,362
XFR/ XKR Supercharged version of XF and XK to be
Freelander 66,582 Z4/6 Series 48,009 CL 10,700 TT/R8/A5 73,276
launched in 2009
Defender 23,154 X3 111,879 ML 139,900 Q7 81,775 X-Type To be phased out in 2010, replacement
Discover 47,522 X5 120,617 GL 40,200 unlikely
RR Sport 58,836 X6 NA XJ New version expected in 2010
Range Rover 30,299
XF Coupe Expected to be launched in 2010
F-type Expected to be launched in 2011-12
Geographical break-up
Land Rover: Product pipeline
Country AUDI BMW MERC Jaguar Land Rover
US 82,169 335,840 253,400 16,620 53,422 Model Change (Model + Year)
UK 100,712 173,685 NA 18,730 50,664 LRX Expected to be launched by 2011, to
Europe 432,466 703,123 682,300 35,486 84,747 meet EU emission norms
China 101,996 51,588 26,900 1,000 9,320 Discovery New Gen expected by 2011
Russia 36,073 14,686 15,300 1,000 - Freelander New Gen expected by 2012
Others 311,097 408,740 305,400 - 27,737 Range New Gen expected by 2013
India 350 1,387 2,600 - 70 RR Sport New Gen expected by 2014
Global 964,151 1,500,678 1,285,900 60,485 226,395
Defender New Gen expected by 2014
Source: Autocar, ENAM Research
Source: Media Reports, ENAM Research

 JLR has lacked the scale of operations vis-à-vis competition

„ JLR has outlined an ambitious plan to overhaul the entire product portfolio over the next 10 years
„ If the early success of the XF is anything to go by, we believe that Jaguar operations will turn around

TAMO has underwritten JLR’s investment plan for 5 years

13
Concerns
 Global slowdown 2008 volume trend YTD – May-08
250,000
„ With a slowdown in the US, the luxury car and SUV (No.s- Land Rover
markets are expected to soften 200,000 USA)

150,000
 2012 deadline will be difficult to meet…
„ Major EU emission norm change in 2012 (to 130g/ km) 100,000
will be a major hurdle for all manufacturers 50,000
„ None of the current JLR products adhere to the 2012
standards. Penalties can be significant: 0
` Jaguar X-Type emits 149gm/km = £1,292 as penalty Hummer GMC Jeep Lexus USA Europe
` Land Rover RR emits 376gm/km = £16,728 as penalty 2007 2008
„ Niche players such as JLR are hopeful of some respite/
Source: AECA, Bloomberg, ENAM Research
exemption from the new norms due to low volumes. Note: Jeep and LR (Europe) volumes are till April-08

 …will lead to ballooning R&D costs R&D: Critical for all players
„ JLR’s combined R&D spend expected to be in excess of 10,000 15
(USD mn) (%)
USD 1.5bn over the next two years. 8,000 12

6,000 9
 Pension fund is fully funded… for now
„ Ford to contribute USD 600mn towards pension deficit 4,000 6
„ Next actuarial study to be conducted in 2009. 2,000 3

0 0
 Royalty payments to Ford remain unclear

GM
Toyota

Honda

BMW
Daimler

Ford

Audi

Porsche
VW
„ Retail financing could be an issue going ahead as Ford
has extended its retail financing to JLR for one year.
R&D Expenditure (LHS) % of sales (RHS)
Source: Bloomberg, ENAM Research

14
 Existing Business
High interest rates and inflation; slowing recovery in volumes

15
Existing products: Rough ride ahead
 Testing times back home
„ High inflation and possibility of a slowdown in the domestic economy, looms over profitability

 M&HCV business (Slide 19)

„ Industry is expected to grow at ~5-7% due to rising fuel costs and freight rates
„ Increased competition from new players is making life difficult for TAMO

 Cars (Slide 24)

„ Indica and Indigo have seen a loss in volumes of 12.6% YTD in FY08, with declining market share
„ Single product strategy difficult to sustain in a competitive market, Indica and Indigo to get
increasingly marginalized in the coming period

 Nano: Opportunities galore, but profitability uncertain (Slide 27)

„ While the Nano’ has huge potential, profitability with a 100,000 price tag remains uncertain

 LCV business (Slide 28)

„ Only player in the <1 ton market currently, but intense competition expected in the coming months

 Subsidiaries: Full steam ahead (Slide 31)

„ Performances of all subsidiaries in FY08 has been above expectation.
„ We expect further value unlocking in the coming 12 months

16
TAMO: Capex plans
 TAMO has outlined an aggressive capex plan of Rs 100bn over the next 3-4 years

Expansion plan details New product

Segments Current Planned Expected introduction plan
capacity capacity

Cars 225,000 300,000 Next 2 years Capacity Expansion

Per day 750 1,000 New Products
& Sustenance

Small Car - 250,000 Q3FY09

Utility Vehicles 60,000 90,000 Next 2 years Commercial Passenger

vehicles vehicles
M&HCV 130,000 221,000 Next 2 years
World Truck Next Generation
LCV 60,000 90,000 Next 2 years
Car Platform
New LCV
ACE 75,000 200,000 3Q FY08
New UV Platform
Source: Company, ENAM Research Ace Plant

Small Car

We believe the capex is imperative for TAMO as most of its products are dated

17
New platform launches
 TAMO intends to spend Rs 100bn over a period of 3-4 yrs towards development of
new platforms across product categories.

Tata – Fiat Small car

Global Truck- New platform M&HCV (Dec-08)

Nano (Q3 FY09)

New Gen Indica (H2FY09)

Products

Xenon Pick-up (Mar-08)

Sumo Grande (Feb-08)

Indica V2 Dicor
(Jan-08)

Indigo CS
(Jan-08)

FY08 FY09 FY10

Source: Company, ENAM Research Time line
18
M&HCV business

19
Domestic CV: Slowdown to continue?
Commercial Vehicles: Domestic growth (YoY) over the last 18 years
40
(%)
30
20
10
0
(10)
(20)
(30)
(40)

FY09E
FY92

FY93

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08
M&HCVs LCVs Total CV

 Growth in domestic CVs has moderated in FY08 as expected, we expect it to

revive marginally in FY09
„ High interest rates, rising fuel costs have put pressure on volumes in FY08
„ We expect the macro-economic situation to improve in H2FY09
„ Industry expects CVs to grow at a 2yr (FY08- FY10E) CAGR of 5-10%.

Source: SIAM, Industry Sources, ENAM Research.

20
Freight rates under pressure
 FY09 under pressure on account of Freight rate and Diesel prices
1.80
„ Firm interest rates and growing NPAs (Rs/ tkm)
1.50
` Crisil has downgraded ICICI’s CV loan pool to
1.20
BB-, as a result of increasing NPAs.
0.90
„ Rise in fuel costs with global price of oil rising 0.60
sharply 0.30
` Petrol prices raised by Rs 5/litre 0.00
` Diesel prices raised by Rs 3/litre

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08
Sep-02

Sep-03

Sep-04

Sep-05

Sep-06

Sep-07
„ Softening of ban on overloading already
being witnessed in some states
Avg. freight rate(rs/tKM) Avg. Diesel prices

 Freight rates expected to rise Source: Cris Infac

„ Operators have been able to pass on price M&HCV: Market share

increases so far… 100%
` Fuel and wage costs have increased sharply 80%
over the last 12 months
60%
 Increased competition 40%

65%

65%
64%

63%
62%

61%
„ With all major global players adding capacity,
20%
raising prices will be difficult
` Eicher-Volvo JV formed in 2008 0%
` New players such as Man, AMW, M&M-ITEC will FY03 FY04 FY05 FY06 FY07 FY08
also will start operations in the next few years TAMO Ashok Leyland Eicher Others
Source: SIAM, Cris Infac, ENAM Research

21
M&HCV Industry: Market structure
FY08

35.2T+ (M&HCV)

25-35.2T (M&HCV)
Tata Motors
64%

Goods 16.2T-25T (M&HCV)

Carriers
Eicher
2%
12T-16.2T (M&HCV) Ashok Ashok
21% 34%

Eicher
Tata Motors
7.5T-12T (M&HCV) 75%
4%

12T-16.2T (M&HCV)
Passenger
Vehicles
7.5T-12T (M&HCV)
(Nos)

0 20,000 40,000 60,000 80,000 100,000 120,000

Ashok Eicher Swaraj Mazda Tatra Trucks India Tata Motors Volvo
Source: SIAM, ENAM Research

TAMO is a leader in every segment

22
Tata-Daewoo (TDCV – Korea)
 2nd largest CV manufacturer of South Revenue and EBITDA trend
50 8
Korea (Rs bn) (%)
„ Contributes ~42% of total subsidiaries’ revenues 40
6
and 7.8% to the consolidated revenues of TAMO 30
„ TAMO has effectively used technology from TDCV to 4
launch higher tonnage vehicles in India and exports 20
` Novus, a high-end tipper developed by TDCV for the 2
10
Indian market
0 0
 TDCV is a major exporter as well FY05 FY06 FY07 FY08 FY09E FY10E
„ Korea’s largest exporter of heavy commercial Revenues (LHS) NPM(RHS)
vehicles.
„ It currently accounts for 65% of CV exports, with Subsidiaries' share of revenues – FY08
exports to South Africa, Middle East, S.E. Asia etc HV Axle
TMFL
Has started assembly operations for heavy-duty 6%
„ 3%
HV
TDCV trucks in Pakistan Transmission TDCV
3% 39%
 Global truck platform in H2FY09
Tata
„ TAMO expects to launch the Global truck platform in
Technologies
Korea in H2FY09, and subsequently in India within 15%
6-9 months
„ Targeted towards the developed markets, in a bid to TELCON
expand TAMO-TDCV’s geographical reach 34%

Source: Company, ENAM Research

Currently TDCV contributes 39% to subsidiary revenues and 23% to profits

23
Passenger Cars

24
Cars: Competition gearing up
 Market share has diminished New products launches
„ TAMO over the last 12 months has lost market Segment Company Product Launch Date (expected)
A2 Segment Hyundai i-10 Launched Nov'07
share to new products launched by competitors Skoda Fabia Launched Jan'08
„ Indica: Value proposition at risk, on account of FIAT Grande Punto 2008 Expected
increased launches in the B Segment. MSIL A-Star Expected Oct-08
Honda Jazz 2009 Expected
„ Indigo: Increased number of diesel launches have MSIL Splash 2009 Expected
dented volumes A3 Segment MSIL SX4 Launched May'07
M&M - Renault Logan Launched April'07
 Aggressive competitive launches in A2 and FIAT Linea 2009 Expected
Ford Focus 2009 Expected
A3 segments
„ New Indica is the only launch expected from TAMO Market share loss in the last 12 months
- Lack of a wider portfolio
25,000 20
„ Shortening product life cycles and new products (No.s) (%)
augur for a larger product portfolio 20,000 18

15,000 16
 TATA-FIAT JV aimed at filling product gaps 10,000 14
„ 50:50 JV with Fiat expanding production and
5,000 12
engine capacity at Ranjangaon
„ Expect 2-3 new models over the next 2 years 0 10

Nov-07
May-07

Dec-07
Jan-07

Jun-07
Jul-07
Aug-07

Jan-08
Feb-07
Mar-07
Apr-07

Oct-07

Feb-08
Mar-08
Sep-07
 TAMO might use cross learning from JLR
to launch a wide range of cars in the Volumes (LHS) Mkt Share (RHS)
future
Source: Company,ENAM Research

The two-product strategy for A2 and A3 segment, needs to change

25
Can the Nano deliver?
 Economics already under pressure Sensitivity Analysis: Nano
„ Rising commodity prices mainly steel and aluminum Realisation (000's)
Sales (Rs mn)
will drive up the cost of the car 90 95 100 105 110 115
„ Plant at Singur remains under controversy, and is 20,000 21,600 22,800 24,000 25,200 26,400 27,600

Monthly Vol
running behind schedule 25,000 27,000 28,500 30,000 31,500 33,000 34,500

(Nos)
30,000 32,400 34,200 36,000 37,800 39,600 41,400
 Possible demand robust, profitability 35,000 37,800 39,900 42,000 44,100 46,200 48,300
40,000 43,200 45,600 48,000 50,400 52,800 55,200
unsure
„ At ~USD 4,000 the addressable market for the
Nano within India and the export market could be EBITDA (Rs mn) EBIDTA Margin
100,000 3% 4% 5% 6% 8% 10%
very large
25,000 900 1,200 1,500 1,800 2,400 3,000
However, profitability with escalating costs remains

Monthly Vol
„
30,000 1,080 1,440 1,800 2,160 2,880 3,600

(Nos)
uncertain 35,000 1,260 1,680 2,100 2,520 3,360 4,200
40,000 1,440 1,920 2,400 2,880 3,840 4,800
 Capacity constraint 50,000 1,800 2,400 3,000 3,600 4,800 6,000
„ The capacity in Singur is expected to be 250,000 in
phase I. We believe that it will take 2-3 years
before supply can match the expected demand.
„ At full capacity the Nano will not have a material
impact on the overall profits of the company

26
 Passenger car industry
FY08

485
A6:Luxry (5001mm & above)

5,241
A5: Premium (4701-5000 mm)

M&M Ford
GM

40,935
10% 13%
6% HM
A4: Executive (4501-4700 mm)
7%
Tata Motors Honda

223,239
14% 18% Hyundai
A3: Mid-size (4001-4500 mm) Hyundai Motor
Maruti 15% 21%
Udyog
22%

853,397
A2: Compact (3401-4000mm)
Maruti
Tata Motors 59%
16%
69,553

A1: Mini - (Upto 3400 mm)

(Nos)

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

DaimlerChrysler Fiat Ford General Motors

Hindustan Motors Honda Hyundai Maruti Udyog
Skoda Tata Motors Toyota M&M

Source: SIAM, ENAM Research

27
LCVs

28
Is Ace losing steam?
 Tata Ace: History LCVs: Quarterly sales
50,000 100
„ Indigenously designed and developed with a project (No.s) (No.s)
cost Rs 2bn over a period of 5 years. 40,000 80
„ Initial capacity of 70,000 units. Plans to increase
30,000 60
capacity to 200,000 units by Q3FY08.
20,000 40
 Expanding portfolio 10,000 20
„ TAMO has launched a passenger variant of the Ace in
0 0
September – 07

Dec-04

Dec-05

Dec-06

Dec-07
Jun-04

Jun-05

Jun-06

Jun-07
„ Expected to launch a 1-ton payload Ace for the export
market by Q3FY09, and a CNG variant of current Ace.
Volumes (LHS) Market Share (RHS)

 Exports a big possibility Increased competition

„ TAMO has launched Ace in Sri Lanka, and hopes to Company Investment Timeline
expand into other developing markets as well (Rs mn)
Piaggio H1FY07
 Competition heating up M&M FY09
„ A number of industry players are in the process of
Hyundai 10,000
developing a <1 ton product to rival the Ace.
Atul Auto 1,200 H2FY09
„ We expect competition to increase significantly in the
Bajaj-Renault FY09
coming months
Ashok Leyland-Nissan 20,000 FY10
Hero-Daimler 16,500 FY10

Source: Company, ENAM Research

29
 LCV Industry: Market structure
FY08
Force
Eicher Motors
12% 1% M&M
5T-7.5T 12%
Swaraj
Goods Mazda
Tata Motors
9% Force
Carrier 66%
Motors M&M
4% 30%
Upto 5T

Eicher Tata Motors

Ashok M&M 66%
10%
3% 11%
Swaraj
5T-7.5T Mazda
Tata Motors 13%
63%
Passenger Force
Carrier Tata Motors Motors
24% 43%
Upto 5T
HM 2%
M&M
(Nos)
33%

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

Ashok Eicher Force Motors Hindustan Motors

M&M Swaraj Mazda Tata Motors Piaggio

Source: SIAM, ENAM Research

Ace’s virtual monopoly in <1 ton segment is under threat

30
Subsidiaries and Exports

31
Subsidiaries… strong traction
 HV transmission and HV axles – 85% ownership
„ Captive transmission and gearbox manufacturing facilities are the most profitable amongst all
subsidiaries.
„ Both are expanding capacities to service the growth in production. TAMO has sold 15% in both HVAL
and HVTL in FY08 to unlock shareholder value.

 Tata Daewoo Commercial Vehicles (TDCV) – 100% ownership

„ Acquired the CV facility in South Korea for Rs 4.65bn. TDCV has improved its performance post that
takeover and is now the second largest (24% share) CV manufacturer in South Korea.
„ TAMO intends to use TDCV’s engineering and design capabilities to launch CV for domestic and
exports market.

 Tata Technologies (TTL) 87% ownership

„ TTL and INCAT (acquired in Nov 2005 for Rs 4.3bn) provide engineering and design services (E&D)
and product life cycle management (PLM) product and services.
„ Offshore capabilities of TTL combined with high-end on-shore strengths of INCAT are expected to
offer strong and seamless onshore/offshore delivery capability to international customers.
„ TAMO expects the operations of TTL to turn-around, and become a profit-center for the company.

 Tata Construction Equipment Co. (TELCON) – 60% ownership

„ 60:40 JV with Hitachi Construction (40%), Japan (HCM). Is one of the largest manufacturers of
construction equipments and allied services.
Note: Refer to slide 39 for financial details of subsidiaries.
32
TELCON
 India’s largest construction equipment co. Revenue and EBITDA trend
60 30
„ More than 50% market share in India, with annual (Rs bn) (%)
revenues of Rs 27bn and PAT of Rs 3.2bn in FY08. 50 25

„ TELCON ranks 38th in the world on turnover and plans to 40 20

be in the top 25 by 2012. 30 15
„ Product range includes hydraulic excavators, crawler 20 10
cranes, wheel loaders, backhoe loaders, dumpers and
10 5
motor graders etc.
0 0
FY05 FY06 FY07 FY08 FY09E FY10E
 JV with Hitachi (60:40)
Revenue (LHS) EBITDA Margin (RHS)
„ 60:40 JV between TAMO and Hitachi Construction, Japan
(among the top 5 Construction Equipment Cos worldwide)
Products and market share
„ Also has a technological collaboration with John Deere, 6,000
Hitachi Sumitomo and Promtractor (Russia). (No.s) 5,003
5,000

 Future plans 4,000 3,499

2,638
„ Capacity expansion at Jamshedpur and Dharwad (with 3,000 53%
1,860
investment of Rs 1.8bn), and plans to set up a green-field 2,000
53%
facility at Kharagpur with an investment of Rs 6bn 1,000 10% 11.5%
„ Acquired 79% in Serviplem, Spain (concrete equipments) 0
and 60% in Comoplesa Lebrero SA, Spain (compactors). Excavators Wheel and Bakhoe
loaders
FY07 FY08

Source: Company, ENAM research

Note: % indicates market share
33
Tata Autocomp (TACO)
 One of India’s leading auto component Revenue trend
1,000
manufacturers (USD mn) 828
„ Supplier to variety of customers– Passenger 800 710

Vehicles, Commercial Vehicles, Farm Tractors, 600 506

Two and Three Wheelers 364
400
„ Planned turnover to reach USD 1bn by FY10
„ Has witnessed rapid growth of 40% CAGR over 200

the last few years 0

„ 54% held by TAMO (direct + indirect) FY05 FY06 FY07 FY08E

TACO: World class JVs

 JV specialist
„ 15 Global partners, 30 plants, 3 Export
Oriented Units, in India and 6 Engineering
Centers
„ Overseas manufacturing facilities in Germany
and China.
 Future Plans
„ Existing capacity for batteries at Ranjangaon,
Pune will be expanded to 1mn units by October
2008 with an investment of Rs 0.6bn
Company Product
Johnson Controls, USA Seating and interior systems etc
Faurecia, France Seats, Cockpits, Doors, Exhaust systems etc
T.Rad, Japan Heat exchangers
Yazaki Corporation, Japan Cables, Housings, Connectors & Terminals etc
Owens Corning, USA Noise control system
Knorr-Bremse FE, Germany Air braking systems, Door systems for rail
vehicles
Menzolit Fibron GmbH, Germany Sheet-molded composites (SMC)
Ficosa International, Spain Rear-view systems, Plastics and electrical
systems, Security and locking systems
SungWoo Hitech, South Korea Automobile body & Tools, dies and jigs
Hendrickson International,USA Truck, Bus, Trailer Suspension etc
Visteon Corporation, USA Chassis, climate, interiors, exteriors, power
train, glass and electronics
GS Yuasa International, Japan Lead-acid & Advanced batteries
Source: Company, ENAM Research

34
Financials

35
TAMO: Overall volume estimates
Volumes FY06 FY07 FY08 FY09E FY10E
M&HCV 136,851 185,175 179,400 188,842 199,411
% Growth 1.1% 35.3% -3.1% 5.3% 5.6%
LCV 108,084 149,258 173,434 195,662 221,155
% Growth 45.6% 38.1% 16.2% 12.8% 13.0%
Total CV 244,935 334,433 352,834 384,504 420,566
% Growth 16.9% 36.5% 5.5% 9.0% 9.4%
Cars 169,102 195,408 179,268 175,800 182,400
% Growth 10.6% 15.6% -8.3% -1.9% 3.8%
Nano - - - 60,000 300,000
% Growth - - - - 400.0%
MUV 39,781 49,526 50,299 52,346 57,684
% Growth 7.4% 24.5% 1.6% 4.1% 10.2%
Total Vehicles 453,818 579,367 582,401 672,651 960,650
% Growth 14% 28% 1% 15% 43%
Source: Company, ENAM Research

36
Company Financials: (Standalone)
Income statement Key ratios
Y/E March 2007 2008E 2009E 2010E Y/E March 2007 2008E 2009E 2010E

Net sales 274,443 287,308 305,947 336,867 Sales growth 32.9 4.7 6.5 10.1
Other operating income 0 0 0 0
Total income 274,443 287,308 305,947 336,867 OPM 11.4 10.1 8.9 9.2
Oper. profit growth 24.7 (7.8) (5.5) 13.4
Cost of goods sold 233,470 248,970 269,148 296,296 COGS / Net sales 85.1 86.7 88.0 88.0
Contribution (%) 0 0 0 0 Overheads/Net sales 3.5 3.3 3.1 2.9
Advt/Sales/Distrn O/H 9,608 9,426 9,488 9,612 Depreciation / G. block 6.7 4.1 4.1 4.2
Effective interest rate 9.0 7.0 7.0 7.0
Operating Profit 31,365 28,912 27,311 30,959
Other income 2,452 3,444 3,789 3,978 Net wkg.cap / Net sales 0.1 0.0 (0.0) (0.0)
Net sales / Gr block (x) 3.3 2.3 1.8 1.7
PBIDT 33,817 32,357 31,100 34,938
Depreciation 5,863 6,523 7,794 9,031 Incremental RoCE 23.1 (41.9) (12.9) 12.2
Interest 3,131 2,824 2,981 3,506 RoCE 28.9 22.4 18.1 17.8
Other pretax 0 0 0 0 Debt / equity (x) 0.6 0.5 0.5 0.5
Pre-tax profit 24,824 23,010 20,325 22,400 Effective tax rate 25.9 23.8 25.0 25.0
Tax provision 6,438 5,476 5,081 5,600 RoE 29.7 23.3 17.7 17.6
(-) Minority Interests 0 0 0 0 Payout ratio (Div/NP) 30.2 28.5 37.9 34.4
Associates 0 0 0 0
Adjusted PAT 18,385 17,534 15,243 16,800 EPS (Rs.) 45.1 41.2 35.8 39.4
E/o income / (Expense) 750 2,764 0 0 EPS Growth 18.8 (8.8) (13.1) 10.2
CEPS (Rs.) 62.9 62.4 59.8 67.0
Reported PAT 19,135 20,298 15,243 16,800 DPS (Rs.) 15.0 15.0 15.0 15.0

Source: Company, ENAM Research

37
Company Financials: (Standalone)
Balance sheet Cash flow
Y/E March 2007 2008E 2009E 2010E Y/E March 2007 2008E 2009E 2010E

Total assets 116,556 130,541 144,427 164,900 Sources 30,110 19,152 21,680 29,526
Gross block 87,758 158,191 188,191 213,191 Cash profit 25,891 24,518 23,444 26,279
Net fixed assets 38,813 102,723 124,929 140,898 (-) Dividends 6,763 6,763 6,763 6,764
CWIP 25,133 3,000 3,000 3,000 Retained earnings 19,128 17,754 16,680 19,515
Investments 24,770 26,770 28,770 30,770 Issue of equity 1,062 10 0 11
Wkg. cap. (excl cash) 19,573 (14,781) (14,697) (10,935) Borrowings 10,723 0 5,000 10,000
Cash / Bank balance 8,268 12,829 2,425 1,167 Others (803) 1,388 0 0
Others/Def tax assets 0 0 0 0
Applications 30,110 19,152 21,680 29,526
Capital employed 116,556 130,541 144,427 164,900 Capital expenditure 24,596 48,300 30,000 25,000
Equity capital 3,854 3,854 3,854 3,854 Investments 4,619 2,000 2,000 2,000
Reserves 64,743 78,267 86,747 96,772 Net current assets 5,308 (34,354) 84 3,762
Borrowings 40,091 40,091 45,091 55,091 Change in cash (4,413) 3,206 (10,404) (1,235)
Others 7,868 8,328 8,735 9,183

Source: Company, ENAM Research

38
Subsidiaries: Financials and Valuations
Quarted Ended Year Ended
(Rs.mn) Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q4FY08 FY06 FY07 FY08 FY09E
TDCV
Sales 5,655 5,896 7,118 7,360 6,640 9,705 7,047 15,849 23,336 30,752 36,902
PAT 240 225 161 310 410 669 196 583 830 1,585 1,661
TELCON
Sales 3,522 4,863 6,191 4,780 6,940 7,020 8,440 12,895 18,277 27,180 36,283
PAT 371 493 664 660 810 932 835 868 1,839 3,236 3,901
Tata Technologies
Sales 2,425 2,469 2,441 2,660 2,620 2,411 3,311 5,450 9,605 11,003 13,203
PAT 31 34 88 30 80 68 122 116 163 300 442
HV Transmission
Sales 405 472 505 390 430 514 589 1,276 1,756 1,923 2,154
PAT 96 133 123 70 100 131 174 301 450 474 520
HV Axle
Sales 443 530 570 400 440 541 652 1,439 1,967 2,032 2,236
PAT 125 180 131 100 120 136 278 463 579 634 641

Valuations
Subsidiaries TAMO Net Profit ROCE (%) RoE (%) P/E Valuation share per
holding FY08E FY09E FY07 FY07 (X) (Rs mn) of TAMO share
Tata Daewoo 100% 1,585 1,661 54.6% 10.1% 12.0 19,927 19,927 46.8
HV Axles 85% 634 641 45.7% 32.4% 10.0 6,405 5,445 12.8
HV Transmission 85% 475 520 49.2% 38.3% 10.0 5,195 4,416 10.4
Telcon 60% 3,235 3,901 67.5% 44.7% 15.0 58,510 35,106 82.4
Tata Technologies 85% 300 442 10.5% 6.5% 12.0 5,308 4,499 10.6
TACO 50% N.A. N.A. N.A. N.A. 0.75* 33,912 16,922 39.7
Total non-core 86,315 203
Source: Company, ENAM Research
39
Company Financials: (Consolidated)
Income statement Key ratios
Y/E March 2007 2008 2009E 2010E Y/E March 2007 2008 2009E 2010E

Net sales 320,996 356,515 395,720 439,359 Sales growth 38.3 11.1 11.0 11.0
Other operating income 0 0 0 0
Total income 320,996 356,515 395,720 439,359 OPM 11.5 11.8 10.0 10.3

Oper. profit growth 30.0 13.6 (6.0) 14.2

Cost of goods sold 259,507 285,277 323,970 356,647 COGS / Net sales 80.8 80.0 81.9 81.2
Contribution (%) 0 0 0 0 Overheads/Net sales 7.6 8.2 8.1 8.5
Advt/Sales/Distrn O/H 24,449 29,175 32,203 37,562 Depreciation / G. block 6.4 4.8 4.8 4.9
Effective interest rate 7.6 9.8 7.0 7.0
Operating Profit 37,040 42,063 39,547 45,150
Other income 4,321 2,675 2,809 2,949 Net wkg.cap / Net sales 0.1 0.2 0.1 0.1
Net sales / Gr block (x) 3.1 2.6 2.2 2.1
PBIDT 41,361 44,738 42,355 48,099
Depreciation 6,886 7,821 9,326 10,886 Incremental RoCE 13.0 19.3 (12.9) 17.1
Interest 4,058 7,431 5,846 6,651 RoCE 27.6 22.7 18.0 18.0
Other pretax 16 0 0 0 Debt / equity (x) 0.92 0.8 0.8 0.9
Pre-tax profit 30,401 29,487 27,183 30,562 Effective tax rate 28.5 28.9 28.9 28.5
Tax provision 8,673 8,515 7,850 8,710 RoE 30.0 23.3 18.4 18.5
(-) Minority Interests 742 1,323 1,560 1,911 Payout ratio (Div/NP) 27.4 31.5 41.5 45.2
Associates 394 652 717 789
Adjusted PAT 21,380 20,301 18,490 20,730 EPS (Rs.) 52.5 47.7 43.4 48.7
E/o income / (Expense) (319) 1,323 0 0 EPS Growth 22.5 (9.2) (8.9) 12.1
CEPS (Rs.) 73.3 73.0 72.2 82.0
Reported PAT 21,061 21,623 18,490 20,730 DPS (Rs.) 15.0 17.7 19.9 24.3

Source: Company, ENAM Research

40
Company Financials: (Consolidated)
Balance sheet Cash flow
Y/E March 2007 2008 2009E 2010E Y/E March 2007 2008 2009E 2010E

Total assets 163,530 184,625 207,791 232,701 Sources 63,925 27,593 32,492 35,796
Gross block 108,022 162,838 195,838 222,838 Cash profit 30,019 29,824 29,610 33,807
Net fixed assets 53,755 103,572 125,572 140,572 (-) Dividends 6,836 8,059 9,067 11,082

CWIP 25,817 5,000 5,000 5,000 Retained earnings 23,183 21,765 20,543 22,725
Investments 11,746 12,746 13,746 14,746 Issue of equity 1,121 177 232 281
Wkg. cap. (excl cash) 58,048 50,183 59,458 68,092 Borrowings 39,228 5,000 11,000 12,000
Cash / Bank balance 11,543 10,502 1,394 1,670 Others 394 652 717 789
Others/Def tax assets 2,622 2,622 2,622 2,622
Applications 63,925 27,593 32,492 35,796
Capital employed 163,530 184,625 207,791 232,701 Capital expenditure 27,977 36,821 31,326 25,886
Equity capital 3,854 3,854 3,854 3,854 Investments (869) 1,000 1,000 1,000
Reserves 75,862 90,925 102,140 113,981 Net current assets 39,395 (7,864) 9,274 8,634
Borrowings 73,019 78,019 89,019 101,019 Change in cash (2,577) (2,363) (9,108) 276
Others 10,795 11,827 12,778 13,848

Source: Company, ENAM Research

41
TAMO: Valuation comparison
Company Period Net Sales EBITDA Adj. PAT FDEPS Core EPS Cash per Value of RoCE RoE Core P/E
(Rs mn) (Rs.mn) (Rs.mn) (Rs.) (Rs.) share (Rs.) Invst. (Rs.) (%) (%) (x)

Tata Motors (Conso.) FY06 267,006 28,501 17,293 45 43 - - 31 32 12.6

(CMP: 540) FY07 366,610 37,040 21,380 55 53 - - 28 30 10.3
(MCap: Rs.195bn) FY08 403,408 42,063 20,301 56 48 - - 23 23 11.3
FY09E 451,219 39,547 18,490 48 43 - - 18 18 12.4

Maruti Suzuki FY06 120,034 16,266 11,891 41 36 86 - 35 24 18.6

(CMP: 753) FY07 145,922 19,914 15,745 54 46 122 - 36 26 13.9
(MCap: Rs.218bn) FY08 179,148 23,675 18,359 64 52 144 - 32 24 11.8
FY09E 203,746 24,827 17,554 61 50 165 - 26 19 11.9

M&M (Stand.) FY06 79,888 9,896 6,479 28 25 - 170 27 27 16.7

(CMP: 582) FY07 96,277 13,058 9,725 39 33 - 410 30 30 5.3
(MCap: Rs.135bn) FY08 109,938 13,445 9,463 37 32 - 351 22 24 7.3
FY09E 116,279 12,654 8,599 33 29 - 351 17 19 8.1

Ashok Leyland FY06 52,477 5,401 3,056 2.3 2 - - 15 24 14.1

(CMP: 32) FY07 71,682 7,027 4,544 3.4 3 - - 20 28 9.5
(MCap: Rs.43bn) FY08 75,974 7,567 4,039 3.0 3 - - 17 20 10.7
FY09E 86,801 8,490 4,242 3.2 3 - - 15 19 10.2

For : Earnings and EPS are adjusted for other income. The cash per share reflects the surplus cash on balance sheet. Valuation ratios have been adjusted accordingly
Source: ENAM Research
Note: TAMO does not include JLR. Refer pg1 for conso + JLR estimates

42
Global Valuations
Com pany (USD m n) Period Net EBITDA Adj. PAT PAT EBITDA Rep. FDEPS ROCE ROE PE EV/ Mkt Cap/ BVPS P/ B
Sales Margins Margins EPS grow th (%) (%) (X) EBITDA (X) Sales (X) (Rs) (x)
(%) (%) (Rs) (%)

Suzuki Motor Corp FY07 27,052 2,418 641 2.4 8.9 1.4 30.5 8.4 11.0 - - - 14.0 -
(CMP: 26) FY08 30,631 2,720 702 2.3 8.9 1.6 7.4 n.a 10.6 16.9 4.5 0.5 17.3 1.5
(MCap: USD.14bn) FY09E 34,249 3,008 762 2.2 8.8 1.6 4.8 n.a 9.3 16.1 5.1 0.4 18.0 1.5
FY10E 36,259 3,251 822 2.3 9.0 1.7 6.5 n.a 9.0 15.1 4.7 0.4 19.4 1.4
Hyundai Heavy Industries CY06 13,147 1,317 746 5.7 10.0 11.6 317.1 33.7 17.3 - - - 63.4 -
(CMP: 375) CY07 16,715 2,306 1,868 11.2 13.8 29.9 158.3 n.a 34.8 12.6 11.2 1.7 94.3 4.0
(MCap: USD.29bn) CY08E 17,955 2,855 2,190 12.2 15.9 30.4 1.7 n.a 35.3 12.3 8.9 1.6 96.7 3.9
CY09E 20,976 3,475 2,771 13.2 16.6 38.4 26.2 n.a 34.2 9.8 7.3 1.4 128.1 2.9
Daim ler Ag-Registered SharCY06 124,490 21,916 4,697 3.8 17.6 4.6 31.9 3.4 10.2 - - - 47.4 -
(CMP: 73) CY07 136,004 21,620 5,444 4.0 15.9 5.2 14.1 n.a 10.8 14.0 7.5 0.5 52.8 1.4
(MCap: USD.71bn) CY08E 159,445 21,409 9,184 5.8 13.4 9.3 76.6 n.a 15.4 7.9 6.6 0.4 62.0 1.2
CY09E 165,611 23,133 10,123 6.1 14.0 10.6 14.0 n.a 16.0 6.9 6.1 0.4 69.0 1.1
Fiat Spa CY06 65,031 6,173 1,336 2.1 9.5 1.1 (32.4) 8.7 11.8 - - - 9.7 -
(CMP: 21) CY07 80,083 8,170 2,672 3.3 10.2 2.1 101.4 n.a 19.6 9.9 6.1 0.3 12.3 1.7
(MCap: USD.26bn) CY08E 94,843 10,003 3,693 3.9 10.5 2.9 35.6 n.a 19.4 7.3 4.7 0.3 15.4 1.4
CY09E 100,309 11,171 4,206 4.2 11.1 3.3 13.8 n.a 19.5 6.4 4.2 0.3 17.9 1.2
General Motors Corp CY06 205,601 5,062 (1,978) (1.0) 2.5 (3.5) (81.0) n.a n.a - - - (10.0) -
(CMP: 17) CY07 181,122 5,123 (38,732) (21.4) 2.8 (68.5) 1,855.7 n.a n.a (0.2) 6.4 0.1 (65.5) (0.3)
(MCap: USD.10bn) CY08E 176,936 8,253 (3,277) (1.9) 4.7 (4.6) (93.2) n.a 4.6 (3.7) 3.8 0.1 (57.1) (0.3)
CY09E 184,460 10,369 290 0.2 5.6 (0.7) (84.3) n.a 3.1 (23.5) 3.0 0.1 (54.9) (0.3)
Ford Motor Co CY06 160,065 541 (12,613) (7.9) 0.3 (6.7) (961.5) n.a n.a - - - (2.6) -
(CMP: 6) CY07 172,455 13,092 (2,723) (1.6) 7.6 (1.4) (79.5) n.a n.a (4.7) 10.2 0.1 1.6 3.9
(MCap: USD.14bn) CY08E 147,484 6,011 (1,497) (1.0) 4.1 (0.3) (77.7) n.a 169.7 (21.0) 22.6 0.1 1.4 4.8
CY09E 149,849 7,965 184 0.1 5.3 0.1 (135.7) n.a 6.7 58.7 17.1 0.1 2.9 2.2
Bayerische Motoren Werke CY06 48,999 11,070 2,868 5.9 22.6 4.4 31.4 6 15.9 - - - 29.2 -
(CMP: 57) CY07 56,018 12,397 3,126 5.6 22.1 4.8 8.9 n.a 15.3 11.9 5.3 0.7 33.2 1.7
(MCap: USD.37bn) CY08E 89,271 12,858 4,355 4.9 14.4 6.6 38.8 n.a 12.0 8.6 7.4 0.4 56.0 1.0
CY09E 92,384 13,791 4,696 5.1 14.9 7.3 9.7 n.a 12.4 7.8 6.9 0.4 60.9 0.9
Toyota Motor Corp FY07 204,773 30,964 14,058 6.9 15.1 4.4 17.5 7 14.7 - - - 31.5 -
(CMP: 53) FY08 229,919 32,897 15,024 6.5 14.3 4.7 8.0 n.a 14.5 11.2 8.0 0.8 37.7 1.4
(MCap: USD.183bn) FY09E 243,894 30,263 13,847 5.7 12.4 4.3 (8.2) n.a 11.3 12.2 9.5 0.7 38.9 1.4
FY10E 253,725 32,520 15,226 6.0 12.8 4.7 9.2 n.a 11.8 11.2 8.9 0.7 41.7 1.3

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 ENAM Securities Pvt. Ltd.
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Disclosure of interest statement (As of June 3, 2008)
1. Analyst ownership of the stock No
2. Firm ownership of the stock No
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4. Investment Banking mandate No
5. Broking relationship No
We are committed to providing completely independent and transparent recommendations to help our clients reach a better decision.

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