Analysts' corner

Tata Motors & Glenmark Pharma

TATA MOTORS
Reco price: Rs 147
Target price: Rs 175
Chinese sales are crucial for JLR, as gross margin per unit is three times the company average. Land Rover (Ebitda margin 17-18 per cent) remains more profitable than Jaguar (four-five per cent). JLR's turnaround masked the underperformance of Indian business and TAMO's net-debt per equity (0.67 times) is due to the negative free cash flow in India-based business. Key metrics to watch: JLR volume growth and India business FCF. Deutsche Bank has reduced its FY12 and FY13 EPS estimates by 28 and 36 per cent, respectively. It has reduced the target price by 29 per cent. Maintain buy.

—Deutsche Bank

GLENMARK PHARMA
Reco price: Rs 321
Target price: Rs 388
Glenmark is turning the tide and for good reasons. Unlike in the past, where R&D milestone and cash flow from domestic business funded growth of the base business, the company's base business has attained a scale which is not only self-sustainable, but can also fund its NCE R&D. Glenmark's focus on improving the cash conversion cycle should ease concerns on high receivables. Receivable days have dipped to 125 in Q1FY12 (from 205 in Q1FY09). Initiate coverage with buy.

—Hathway Cable & Datacom