In July 2009, Tata Motors’ volume increased 18% y-o-y (and 5.8% m-o-m) to 48,054 units. This is the first instance of volume growth after nine consecutive months of declines.
The key growth drivers were the CV segment (both LCVs and M&H CVs did well) and the commencement of Nano dispatches.
M&H CV volume increased 8.6% y-o-y (and 7% m-o-m) to 11,695 units. The segment has recorded y-o-y growth after 12 consecutive months of declines. Volume growth in M&H CVs was boosted by the 53% rise in exports, while domestic volume was 5.6% higher.
LCV sales were also robust, with 28.9% growth to 18,618 units. Exports dragged down volume as it declined 59.9% y-o-y, while domestic sales were up 44.5% y-o-y.
Car sales increased 17.7% y-o-y (and 6.5% m-o-m), boosted by the launch of the Nano. Nano saw sales of 2,475 units; excluding Nano, car sales were 1.8% lower y-o-y. Car exports were under pressure, declining 37.1% y-o-y. UVs were flat y-o-y, but slipped 18% m-o-m.
We expect volume growth of 14.1% in FY10, fuelled mainly by the Nano. Year-to-date volumes are 0.8% lower y-o-y, translating into residual growth estimate of 22%. We maintain BUY rating on the stock.