Rise in Share Price of TATA Motors
The single largest EV player in the country declared that it will invest in the range of Rs.16000 crore to Rs.18000 crore exclusively into its electric vehicle (EV) till FY30 or 2029-30.
There was a nearly 2.3 percent increase in shares of Tata Motors to Rs.1010 in early trade for the fifth straight session of its upward journey on the BSE. Pvt Brokerages keep ‘overweight’ on the stock as per the growth plans shared by the firm during its meeting with investors. As for the leading electric vehicle player, it announced an investment intent of Rs.16000–18000 crore in the electric vehicle division through the financial year ending in 2030.
This is already a contrarian call, as Jefferies has recently said it is going to focus its buy call on Tata Motors at Rs.1,250 a share. The firm again mentions the strategies that are intended to enhance the company’s brand and increase profitability in the passenger vehicle and commanding vehicle divisions. Tata Motors plans to reach 16 percent of its market share by FY27 and 18–20 percent by FY30.
Furthermore, the CV segment EBITDA margin and the PV margin are targeted in double digits by Tata Motors, while it also focuses on getting a breakeven in the EV segment by FY 26.
The management also stated that they are sure about attaining a financially sustainable state within the company by attaining a net debt position by the financial year 2025. Also, it has targets for the maker of Nexon, with a view to having more than 25% market share in various segments.
Another reputed brokerage house, Morgan Stanley, has put in stock with an equal weightage recommendation for the target of Rs.1,100 per share. Current strategic business segments of the company are now rather independent and stand-alone business units, and thus more demergers make sense as the next organizational steps toward their enhanced autonomy. Macroeconomic factors and their modality, as stated above, are expected to stretch the business cycle of commercial vehicles (CV), according to some analysts in their note recently.
It is estimated that the ICE segment would deliver an increase in free cash flow (FCF), while the EV segment is deemed capable of attaining an FCF breakeven in the middle of the course.
IncCred Equities believes that among automotive key players, Tata Motors Limited, especially its CV division, has a far superior RoCE of 36% in an enviably flat volume growth.
While the CV business may take a year to develop, after that, IncCred prefers the CV business. This has resulted in a lower rating due to the gradual rise in India PV or Tata Motors’ business and performance at JLR.
At about 9:45 am, shares of the company were at 1008, 2% higher than the last close on the NSE. The share of Tata Motors has been on the rise in the past week, and it rose by six percent.
