Tata Motors reported fiscal 2015 first-quarter sales of INR 646 billion, up 38% against the prior corresponding period. Favorable trends were evident in product and geographic mix, which supported a jump in Tata’s earnings before interest, tax, depreciation and amortisation, or EBITDA margins to 18.2%. This represents a 3.7 percentage point increase from a year earlier. Improved group EBITDA margins were mainly driven by a 4.5 percentage point jump in Jaguar and Land Rover, or JLR, margins. Tata's Indian operations delivered a lower-than-expected operating loss of INR 6 billion, versus our INR 10.3 billion loss forecast. This was mostly due to a improved performance from its heavy commercial vehicle segment.
Tata’s narrow economic moat rating remains unchanged. We are raising our fair value estimate to INR 550 per share, from INR 449. On the back of the first quarter’s performance, we've increased our JLR five-year average revenue growth assumptions to 9.6%, versus our earlier forecast of 7.2%. Our growth assumptions for the Chinese market are supported by the opening of a new manufacturing plant and a broader distribution footprint. Coupled with the launch of the Jaguar XE in the fourth quarter, this should allow market share gains at the lower end of the premium segment in the Chinese market. We've increased our revenue growth assumptions for the Indian business to 11.6% from 8%, compounded annually, for our five-year forecast period. We've test-driven Tata’s Zest, and expect its launch to drive Indian sales higher in 2015’s second half. Zest and Bolt are targeted at about 55-60% of the Indian passenger vehicle market and if Tata is able to deliver on the after sales and marketing, then we expect market share gains in the passenger vehicle segment.
While product mix shifts can influence margins, we expect group EBITDA margins to average about 14% over the next five years, as JLR margins normalize, and as conditions improve across the Indian operations. We are forecasting just over one million unit sales for 2015, with a 4% decline in Indian volumes offset by a 12% increase in JLR units.
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