Following is a valuation of Tata motors submitted for Stage 2, Holt Valuation challenge. Awarded the Status of HOLT Champion. Students certified as HOLT Champion are the best performers in the HOLT Valuation Challenge. Rewarded the Paid License of HOLT Lens Software developed by Credit Suisse until i graduate. What is the HOLT Valuation Challenge? Stage 1 – The HOLT Challenge stage 1 is a three-week game that will help you learn or improve your understanding of accounting, finance and valuation. Stage 2 - You could qualify to participate in the 2nd round of the challenge; you will be asked to submit a video presentation to showcase your finance knowledge by preparing a stock pitch that will be evaluated by Credit Suisse professionals and members of Project Firefly’s Academic Review Board. Stage 3 - The best participants will be invited to stage 3, an interview with Credit Suisse and affiliates: You will be invited to interview with Credit Suisse and affiliates for 1 of 10 internship or co-op positions in 2016. http://www.holtvaluationchallenge.com/less

1. .
BY- VIBHOR GOEL
SHAHEED SUKHDEV COLLEGE OF BUSINESS STUDIES
UNIVERSITY OF DELHI
INDIA
HOLT VALUATION CHALLENGE STAGE 2
Greetings to: &

2. CONTENTS
Section 1: Introduction
Section 2: Company Analysis
Section 3: Peer Comparison/Industry Overview
Section 4: Risk Analysis
Section 5: Price the stock
Section 6: Final Decision

3. INTRODUCTION
Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) is
an Indian multinational automotive manufacturing company headquartered in Mumbai,
Maharashtra, India and a subsidiary of the Tata Group.
It is the world's 17th-largest motor vehicle manufacturing company, fourth-largest truck
manufacturer, and second-largest bus manufacturer by volume.
CEO- Cyrus Pallonji Mistry
1. Introduction

4. Malaysia*
Thailand
Bangladesh *
Nepal, Sri Lanka
Kenya*
Russia*
Ukraine*U.K.
Italy
Senegal
Afghanistan
Uzbekistan
Brazil
South Africa*
Egypt
Saudi Arabia
Iraq, Iran
China
South Korea*
LATAM
West Africa
North Africa
West Europe
Central Asia
East Asia
South Asia
South East Asia
West Asia
East Africa
South Africa
OTHER COLLABORATIONS/M&A & JVs
• Tata Daewoo Commercial Vehicle
• Hispano in Spain & Marcopolo In Brazil
• JV with Jardine Matheson for Concorde Motors
• Technology Tie Ups at Spain, Italy
• British premium car maker Jaguar Land Rover
• JV with Hitachi

5. 2. Company Analysis

6. Information Source: 69th ANNUAL REPORT 2013-14
2.

7. An Average CFROI Levels of 11% since 2009
and 7.16% since 1993
Asset Growth Strategy in line with the
consistent CFROI levels.
A Strong Upward Moment of the stock
price since 2002 mainly because of
capturing the market efficiently and
product diversification and also discovering
new markets overseas.
Few Drop outs seen
in CFROI Levels
Acquires Jaguar
Land Rover from
Ford Motor
Company
Also because of the
launch of Tata Nano
and a new range of
world standard trucks
the next year

8. Tata Motors plunged into an crisis
when the demand for its trucks
suddenly collapsed. The company
count not show positive figures for
PAT in 2001-02 and didn't declare a
dividend in that year. Average
share prices fell to Rs 90 in 2001-02
Over the next two years, the
company shaved around 8 billion
rupees from its cost base and
nursed itself back to corporate
health.

9. Well Above the
market-implied CFROI

10. 3. INDUSTRY OVERVIEW-MAJOR
COMPETITORS
3. Peer Comparison

12. Market Capitalization for TATA Motors is
highest in the industry showing the
popularity and the scale of Tata motors
among its competitors.
TATA Motors has the highest Institutional
Investors and has a great potential on the
Indian market indexes.
Since Mahindra & Mahindra Ltd. Has Second best Market Cap in the market, It is TATA’s biggest Competitor

15. Which clearly indicates that Tata Motors is ahead
of its competitors when it comes to CFROI Levels,
Profit Margins.

16. Section 4: RISK ANAYLSIS
Tata Motor’s Interest
coverage in the FY 2014
was in par with the
median ratio of the
industry.
However, it was less in
comparison to the peer
groups.
Interest Coverage – 5.73
4. Risk Analysis

17. However, The Credit rating of Tata Motors has been the lowest in the industry mainly due to the low
interest coverage ratio.
4.

18. Tata Motor’s Leverage is 19% higher from the industry’s median.
4.

19. Section 4: Verdict
1. Under all these circumstances, we can conclude that Tata Motors is a pretty
risky stock to invest in when compared to the rest of the players in the
automobile industry.
2. However, Its risk is not that great when we see it in a vacuum i.e., when
seen Independently.
Risky in the
Industry
Not That Risky
when seen
independently
4.

20. Valuation of Stock Price
Price the Stock5.
The HOLT Price has been a continuous reflection of the actual price of the stock from a very long period of
time.

22. CALL
BUY
6. Final Decision

23. Sources and References
1. HOLT Lens Software
2. www.bseindia.com
3. 69th ANNUAL REPORT 2013-14
4. https://en.wikipedia.org/wiki/Tata_Motors
5. www.tatamotors.com

24. Thank You
Vibhor Goel
vibhorgoel94@gmail.com