Intrinsic value of Tata Motors ADR - TTM

Previous Close

$31.37

  Intrinsic Value

$80.31

stock screener

  Rating & Target

str. buy

+156%

Previous close

$31.37

 
Intrinsic value

$80.31

 
Up/down potential

+156%

 
Rating

str. buy

We calculate the intrinsic value of TTM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 20.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -1.80
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
Revenue, $m
  39,772
  43,550
  47,492
  51,597
  55,870
  60,313
  64,931
  69,730
  74,718
  79,901
  85,289
  90,892
  96,720
  102,785
  109,100
  115,678
  122,534
  129,682
  137,140
  144,923
  153,050
  161,540
  170,412
  179,688
  189,389
  199,539
  210,160
  221,279
  232,922
  245,117
  257,892
Variable operating expenses, $m
 
  40,370
  44,023
  47,828
  51,787
  55,905
  60,185
  64,633
  69,255
  74,058
  79,051
  84,234
  89,635
  95,256
  101,108
  107,204
  113,558
  120,183
  127,094
  134,307
  141,839
  149,707
  157,929
  166,525
  175,516
  184,922
  194,765
  205,070
  215,860
  227,161
  239,001
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  37,776
  40,370
  44,023
  47,828
  51,787
  55,905
  60,185
  64,633
  69,255
  74,058
  79,051
  84,234
  89,635
  95,256
  101,108
  107,204
  113,558
  120,183
  127,094
  134,307
  141,839
  149,707
  157,929
  166,525
  175,516
  184,922
  194,765
  205,070
  215,860
  227,161
  239,001
Operating income, $m
  1,996
  3,180
  3,469
  3,770
  4,083
  4,408
  4,746
  5,098
  5,463
  5,843
  6,238
  6,658
  7,085
  7,529
  7,992
  8,474
  8,976
  9,500
  10,046
  10,616
  11,212
  11,833
  12,483
  13,163
  13,874
  14,617
  15,395
  16,210
  17,062
  17,956
  18,892
EBITDA, $m
  4,727
  6,150
  6,707
  7,287
  7,890
  8,518
  9,170
  9,848
  10,552
  11,284
  12,045
  12,836
  13,659
  14,516
  15,408
  16,337
  17,305
  18,314
  19,368
  20,467
  21,615
  22,813
  24,066
  25,376
  26,746
  28,180
  29,680
  31,250
  32,894
  34,617
  36,421
Interest expense (income), $m
  782
  619
  805
  999
  1,201
  1,411
  1,630
  1,857
  2,093
  2,339
  2,594
  2,859
  3,135
  3,421
  3,720
  4,031
  4,355
  4,692
  5,044
  5,411
  5,794
  6,194
  6,612
  7,049
  7,505
  7,983
  8,482
  9,005
  9,552
  10,125
  10,725
Earnings before tax, $m
  1,466
  2,561
  2,664
  2,771
  2,882
  2,997
  3,117
  3,241
  3,370
  3,504
  3,644
  3,799
  3,950
  4,108
  4,272
  4,443
  4,622
  4,808
  5,002
  5,205
  5,418
  5,639
  5,872
  6,114
  6,368
  6,634
  6,913
  7,205
  7,510
  7,831
  8,166
Tax expense, $m
  534
  692
  719
  748
  778
  809
  842
  875
  910
  946
  984
  1,026
  1,067
  1,109
  1,153
  1,200
  1,248
  1,298
  1,351
  1,405
  1,463
  1,523
  1,585
  1,651
  1,719
  1,791
  1,867
  1,945
  2,028
  2,114
  2,205
Net income, $m
  916
  1,870
  1,945
  2,023
  2,104
  2,188
  2,275
  2,366
  2,460
  2,558
  2,660
  2,773
  2,884
  2,999
  3,119
  3,243
  3,374
  3,510
  3,652
  3,800
  3,955
  4,117
  4,286
  4,463
  4,649
  4,843
  5,046
  5,259
  5,483
  5,716
  5,961

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  7,624
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  39,924
  35,378
  38,580
  41,915
  45,386
  48,995
  52,747
  56,645
  60,697
  64,907
  69,284
  73,836
  78,570
  83,497
  88,627
  93,971
  99,540
  105,347
  111,405
  117,728
  124,330
  131,227
  138,434
  145,969
  153,850
  162,095
  170,723
  179,756
  189,214
  199,120
  209,498
Adjusted assets (=assets-cash), $m
  32,300
  35,378
  38,580
  41,915
  45,386
  48,995
  52,747
  56,645
  60,697
  64,907
  69,284
  73,836
  78,570
  83,497
  88,627
  93,971
  99,540
  105,347
  111,405
  117,728
  124,330
  131,227
  138,434
  145,969
  153,850
  162,095
  170,723
  179,756
  189,214
  199,120
  209,498
Revenue / Adjusted assets
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
  1.231
Average production assets, $m
  18,663
  20,425
  22,274
  24,199
  26,203
  28,287
  30,453
  32,704
  35,043
  37,474
  40,001
  42,628
  45,362
  48,206
  51,168
  54,253
  57,468
  60,821
  64,319
  67,969
  71,781
  75,762
  79,923
  84,274
  88,824
  93,584
  98,565
  103,780
  109,240
  114,960
  120,951
Working capital, $m
  156
  -4,747
  -5,177
  -5,624
  -6,090
  -6,574
  -7,077
  -7,601
  -8,144
  -8,709
  -9,297
  -9,907
  -10,542
  -11,204
  -11,892
  -12,609
  -13,356
  -14,135
  -14,948
  -15,797
  -16,682
  -17,608
  -18,575
  -19,586
  -20,643
  -21,750
  -22,907
  -24,119
  -25,389
  -26,718
  -28,110
Total debt, $m
  12,236
  11,832
  14,685
  17,656
  20,749
  23,965
  27,307
  30,781
  34,391
  38,143
  42,042
  46,098
  50,316
  54,706
  59,277
  64,038
  69,000
  74,174
  79,572
  85,206
  91,088
  97,233
  103,655
  110,369
  117,390
  124,736
  132,424
  140,472
  148,899
  157,726
  166,973
Total liabilities, $m
  31,926
  31,522
  34,375
  37,346
  40,439
  43,655
  46,997
  50,471
  54,081
  57,833
  61,732
  65,788
  70,006
  74,396
  78,967
  83,728
  88,690
  93,864
  99,262
  104,896
  110,778
  116,923
  123,345
  130,059
  137,080
  144,426
  152,114
  160,162
  168,589
  177,416
  186,663
Total equity, $m
  7,998
  3,856
  4,205
  4,569
  4,947
  5,340
  5,749
  6,174
  6,616
  7,075
  7,552
  8,048
  8,564
  9,101
  9,660
  10,243
  10,850
  11,483
  12,143
  12,832
  13,552
  14,304
  15,089
  15,911
  16,770
  17,668
  18,609
  19,593
  20,624
  21,704
  22,835
Total liabilities and equity, $m
  39,924
  35,378
  38,580
  41,915
  45,386
  48,995
  52,746
  56,645
  60,697
  64,908
  69,284
  73,836
  78,570
  83,497
  88,627
  93,971
  99,540
  105,347
  111,405
  117,728
  124,330
  131,227
  138,434
  145,970
  153,850
  162,094
  170,723
  179,755
  189,213
  199,120
  209,498
Debt-to-equity ratio
  1.530
  3.070
  3.490
  3.860
  4.190
  4.490
  4.750
  4.990
  5.200
  5.390
  5.570
  5.730
  5.880
  6.010
  6.140
  6.250
  6.360
  6.460
  6.550
  6.640
  6.720
  6.800
  6.870
  6.940
  7.000
  7.060
  7.120
  7.170
  7.220
  7.270
  7.310
Adjusted equity ratio
  0.076
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  916
  1,870
  1,945
  2,023
  2,104
  2,188
  2,275
  2,366
  2,460
  2,558
  2,660
  2,773
  2,884
  2,999
  3,119
  3,243
  3,374
  3,510
  3,652
  3,800
  3,955
  4,117
  4,286
  4,463
  4,649
  4,843
  5,046
  5,259
  5,483
  5,716
  5,961
Depreciation, amort., depletion, $m
  2,731
  2,970
  3,238
  3,517
  3,808
  4,110
  4,424
  4,750
  5,089
  5,441
  5,807
  6,178
  6,574
  6,986
  7,416
  7,863
  8,329
  8,815
  9,322
  9,851
  10,403
  10,980
  11,583
  12,214
  12,873
  13,563
  14,285
  15,041
  15,832
  16,661
  17,529
Funds from operations, $m
  4,761
  4,840
  5,183
  5,540
  5,911
  6,298
  6,699
  7,116
  7,549
  7,999
  8,467
  8,951
  9,458
  9,985
  10,534
  11,106
  11,702
  12,324
  12,973
  13,650
  14,358
  15,097
  15,869
  16,677
  17,522
  18,406
  19,331
  20,300
  21,315
  22,377
  23,491
Change in working capital, $m
  223
  -412
  -430
  -448
  -466
  -484
  -503
  -523
  -544
  -565
  -587
  -611
  -635
  -661
  -688
  -717
  -747
  -779
  -813
  -848
  -886
  -925
  -967
  -1,011
  -1,057
  -1,106
  -1,158
  -1,212
  -1,269
  -1,329
  -1,393
Cash from operations, $m
  4,538
  5,252
  5,613
  5,988
  6,377
  6,782
  7,202
  7,639
  8,093
  8,564
  9,055
  9,562
  10,093
  10,646
  11,223
  11,823
  12,450
  13,103
  13,786
  14,499
  15,244
  16,022
  16,836
  17,688
  18,579
  19,512
  20,489
  21,512
  22,584
  23,706
  24,883
Maintenance CAPEX, $m
  0
  -2,705
  -2,960
  -3,228
  -3,507
  -3,798
  -4,100
  -4,413
  -4,740
  -5,079
  -5,431
  -5,797
  -6,178
  -6,574
  -6,986
  -7,416
  -7,863
  -8,329
  -8,815
  -9,322
  -9,851
  -10,403
  -10,980
  -11,583
  -12,214
  -12,873
  -13,563
  -14,285
  -15,041
  -15,832
  -16,661
New CAPEX, $m
  -4,590
  -1,762
  -1,848
  -1,926
  -2,004
  -2,084
  -2,166
  -2,251
  -2,339
  -2,431
  -2,527
  -2,628
  -2,733
  -2,845
  -2,962
  -3,085
  -3,215
  -3,353
  -3,497
  -3,650
  -3,812
  -3,982
  -4,161
  -4,350
  -4,550
  -4,760
  -4,982
  -5,215
  -5,461
  -5,719
  -5,992
Cash from investing activities, $m
  -5,730
  -4,467
  -4,808
  -5,154
  -5,511
  -5,882
  -6,266
  -6,664
  -7,079
  -7,510
  -7,958
  -8,425
  -8,911
  -9,419
  -9,948
  -10,501
  -11,078
  -11,682
  -12,312
  -12,972
  -13,663
  -14,385
  -15,141
  -15,933
  -16,764
  -17,633
  -18,545
  -19,500
  -20,502
  -21,551
  -22,653
Free cash flow, $m
  -1,192
  785
  804
  834
  866
  901
  937
  975
  1,014
  1,055
  1,097
  1,137
  1,182
  1,228
  1,274
  1,322
  1,372
  1,422
  1,474
  1,527
  1,581
  1,638
  1,695
  1,755
  1,816
  1,879
  1,945
  2,012
  2,082
  2,155
  2,231
Issuance/(repayment) of debt, $m
  1,745
  2,734
  2,853
  2,972
  3,092
  3,216
  3,343
  3,474
  3,610
  3,752
  3,900
  4,055
  4,218
  4,390
  4,571
  4,761
  4,962
  5,174
  5,398
  5,634
  5,882
  6,145
  6,422
  6,714
  7,022
  7,346
  7,688
  8,048
  8,427
  8,827
  9,247
Issuance/(repurchase) of shares, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  940
  2,734
  2,853
  2,972
  3,092
  3,216
  3,343
  3,474
  3,610
  3,752
  3,900
  4,055
  4,218
  4,390
  4,571
  4,761
  4,962
  5,174
  5,398
  5,634
  5,882
  6,145
  6,422
  6,714
  7,022
  7,346
  7,688
  8,048
  8,427
  8,827
  9,247
Total cash flow (excl. dividends), $m
  -463
  3,519
  3,657
  3,806
  3,959
  4,116
  4,279
  4,448
  4,624
  4,806
  4,997
  5,193
  5,400
  5,618
  5,845
  6,084
  6,334
  6,596
  6,871
  7,160
  7,464
  7,782
  8,117
  8,469
  8,838
  9,225
  9,633
  10,060
  10,510
  10,982
  11,477
Retained Cash Flow (-), $m
  3,434
  -344
  -349
  -364
  -378
  -393
  -409
  -425
  -442
  -459
  -477
  -496
  -516
  -537
  -559
  -582
  -607
  -633
  -660
  -689
  -720
  -752
  -786
  -821
  -859
  -899
  -940
  -985
  -1,031
  -1,080
  -1,131
Prev. year cash balance distribution, $m
 
  4,486
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  7,661
  3,308
  3,442
  3,580
  3,723
  3,870
  4,023
  4,182
  4,347
  4,520
  4,696
  4,884
  5,081
  5,286
  5,501
  5,727
  5,963
  6,211
  6,471
  6,744
  7,031
  7,331
  7,647
  7,979
  8,327
  8,692
  9,076
  9,479
  9,902
  10,346
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  7,345
  3,028
  2,996
  2,948
  2,886
  2,809
  2,718
  2,614
  2,497
  2,369
  2,230
  2,084
  1,932
  1,775
  1,615
  1,455
  1,297
  1,144
  996
  857
  727
  608
  501
  406
  324
  254
  195
  147
  108
  78
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Tata Motors Limited is an automobile company. The Company is engaged in manufacture of motor vehicles. The Company is engaged mainly in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company's segments include automotive operations and all other operations. The Company's automotive segment operations include all activities relating to the development, design, manufacture, assembly and sale of vehicles, including vehicle financing, as well as sale of related parts and accessories. In the automotive segment, the Company manufactures and sells passenger cars, utility vehicles, light commercial vehicles, and medium and heavy commercial vehicles. The Company's all other operations segment mainly includes information technology (IT) services, and machine tools and factory automation services. The Company operates in over 160 countries across the world.

FINANCIAL RATIOS  of  Tata Motors ADR (TTM)

Valuation Ratios
P/E Ratio 17.4
Price to Sales 0.4
Price to Book 2
Price to Tangible Book
Price to Cash Flow 3.5
Price to Free Cash Flow -306.8
Growth Rates
Sales Growth Rate -1.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -1.6%
Cap. Spend. - 3 Yr. Gr. Rate 3.4%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 113.8%
Total Debt to Equity 153%
Interest Coverage 3
Management Effectiveness
Return On Assets 3.6%
Ret/ On Assets - 3 Yr. Avg. 5.6%
Return On Total Capital 4.3%
Ret/ On T. Cap. - 3 Yr. Avg. 6.9%
Return On Equity 9.4%
Return On Equity - 3 Yr. Avg. 15.4%
Asset Turnover 1
Profitability Ratios
Gross Margin 36.2%
Gross Margin - 3 Yr. Avg. 37.4%
EBITDA Margin 12.5%
EBITDA Margin - 3 Yr. Avg. 13.5%
Operating Margin 5%
Oper. Margin - 3 Yr. Avg. 7.5%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 5.3%
Net Profit Margin 2.3%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 36.4%
Eff/ Tax Rate - 3 Yr. Avg. 31.1%
Payout Ratio 1.2%

TTM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TTM stock intrinsic value calculation we used $39772 million for the last fiscal year's total revenue generated by Tata Motors ADR. The default revenue input number comes from 2017 income statement of Tata Motors ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TTM stock valuation model: a) initial revenue growth rate of 9.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TTM is calculated based on our internal credit rating of Tata Motors ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Tata Motors ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TTM stock the variable cost ratio is equal to 92.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TTM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.8% for Tata Motors ADR.

Corporate tax rate of 27% is the nominal tax rate for Tata Motors ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TTM stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TTM are equal to 46.9%.

Life of production assets of 6.9 years is the average useful life of capital assets used in Tata Motors ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TTM is equal to -10.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $7998 million for Tata Motors ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 636.336 million for Tata Motors ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Tata Motors ADR at the current share price and the inputted number of shares is $20.0 billion.

RELATED COMPANIES Price Int.Val. Rating
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MGA Magna Internat 55.28 88.33  str.buy

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Financial statements of TTM
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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