robust pipeline of new launches. Stable margin outlook is another positive. Any revival in domestic business is an added upside in the near term. We rate Tata Motors OW (overweight) with a target price of R445. We value the company based on SOTP (sum-of-the-parts). We value the JLR business at 4x Ebitda and the domestic business at 6x September 2015e Ebitda.
Downside risks to our view: A higher-than-expected increase in incentives could dent JLR margins. Strengthening of the EUR and weakening of the USD relative to GBP. Risk of design faults in new launches may hurt brand perception. Higher-than-expected investments in their upcoming hybrid vehicles or new electric vehicles is a risk to cash flows.