75th AGM of Tata motors, 2020 ~ Shareholder Awareness Program

Shareholder Awareness Program

Welcome to our blog, our objective is to bring positive change in quality of corporate governance in Indian companies by starting shareholder activism in India!

We will be also sharing experiences on AGM, stock reports and management quality reports.

(click here to download presentation on Shareholder activism)

75th AGM of Tata motors, 2020


75th AGM of Tata motors, 2020

N. chandrasekaran in  75th Annual General Meeting of tata motors, held in 2020

Article published as on Wednesday, 26th August, 2020 at 7:00 a.m.   


Tuesday 25/8/20, 2:00p.m

The meeting started with speech by N. Chandrasekaran.
Now they said they plan to become

Net debt free in 3 years or by FY23

Become free cash flow positive by FY22 on consolidated basis
And
Become free cash flow positive in domestic business this year itself.

Also they clarified doubts regarding qualified opinion by auditors, and also regarding remuneration to their MD exceeding the required law.

Lots of shareholders asked various points.

I also shared my part of queries and suggestions:

I suggested option for DVR shareholder to convert back into ordinary shares with say Rs.60 so that the company get 3000 crores and us DVR shareholders can also benefit. Reason for this was that DVR shares have been widening discount with respect to ordinary shares. Currently the discount is 60% to 65% approximately (ordinary: 127, DVR: 48) normally it traded at 40% to 50%.


Coming to highlight of the meeting and answers given by management.

14:37 started with Q&A

With these answers by N. chandrasekaran

Expectation for remaining part year.
See sales increasing. But not a sharp trends.

The losses made in q1 were significantly high, extremely difficult to reverse them, effort to make operations profitable, so even with reduced volumes there shall be profitability.

No funding from UK government for JLR.

No other new impairment going forward.

We don’t do complete hedging (forex)
Capacity utilization currently at 61% in JLR
China growth was seen in first 2 months... Have to see how it picks up.

Focused on digital initiatives, both in PV and CV also focusing on digital showrooms.

Tata motor finance is in good shape and collections are happening.

Tata motors is actively engaged with dealers. Fixed costs loan have been provided, inventory levels are low.

(Apart from all these matter relating to operations such as huge number of subsidiaries are required, and those not required are being closed. And products performance was discussed, example: nexon are doing well.)

Believe that we have exciting cars and models, we will try to improve market share.

Address and take care of customer experience and satisfaction.

Tata motors is committed to its PV business...

(No truth in media articles stating sale of PV business)

Many people raised issue of dividend.

Dividend top priority for company, but no room in last 3, 4 years.

China very good market for JLR. We will continue there.

The capacity utilization in India is at 30%
In electric buses we won tender in 6/10 states and current order book is of 1000 buses.

Comments on value unlocking through Tata technology and JLR are noted.

Answer to my question: conversion of DVR to ordinary shares is not permitted by articles of association, but we have noted down your suggestion.

Apart from this the chairman missed to answer several questions (not intentionally) as the AGM was around 3 hours long.

Key point
Its investment 

In tata technologies @1000 per share are valued at 3000 crores.

It has 3.07% stake in Tata sons (12375 shares)
As per estimates are valued at 30000 crores.
(Assuming Tata sons to have valuation of 10 lac crores)

These investment are now a part of non-core activities, hence they may get monetised in future.

Conclusion

Tata motors is a company which generated ‘10 thousand crores’ of profits before FY19 AND FY20, if one has to go by the words of the management and judging by their good will and strong backing of Tata group.

Also the announcement of Reduction of debt, no more impairments, and positive free cash flow all are good signs.

If we expect ‘10 thousand crore’ profit after tax in FY23 and give a conservative 10 times PE multiple.

The value is 1 lac crore from current 39260 crores of market cap.
Implying target of 324 Rs. in next 3 years.

So next 3 years will be very crucial and if management is able to do what it has said. Then the returns could be 2 to 3 times in next 3 year.

Tata motors is adopting approach of reliance industries in terms of reducing debt,  people also hope that market will react similarly on Tata motors by appreciation in share price.

(you tube link of the proceedings click here )

Scrip name: TATAMOTORS         price: 127.05       marektcap: 39245.41 crores
Scrip name: TATAMTRDVR         price: 47.90          date: 25/8/20

List of speakers
Arun kumar boppana
Tamal kumar majumder
Adil
H s patel
Rohinton batiwala
Ajay gupte
Jehangir batiwala
Mr jhaveri
Shailesh mahadevia
Vasudha dakwe
Dr. sumit khetarpal
Krishnan ps
Pawan kumar
Praful chavda
Manoj kumar gupta
Priyadarshan naik
Asit kumar Pathak
Rajendraprasad  doshi
Gautam Tiwari
Harsh visharia
Berus and homayun pouredehi
Abhishek advocate
Vallari gupte
Hiranand kotwani
Devang vora
Bharat shah and smita shah
Vinayak bapat
Previous
Next Post »