In this article, we will discuss one such company which is playing aggressively and taking every step in the right direction in the competitive market. Which company is this, which sector it belongs to, is the future of the company promising, and lastly, should you invest in this company?
Tata Motors- One EV Stock to Watch:
- Recently Tata Motors launched Tiago EV, an Electric Vehicle (EV) model in the range of Rs. 10 Lakhs.
- This launching of Tiago EV under the range of Rs. 10 Lakh is a significant move as earlier the EV category vehicles are generally unaffordable for the common citizens, as the price ranges above Rs. 15 Lakhs.
- This launching of EVs under the range of Rs. 10 Lakh presents the strategy of the company for reaching out to the mass segment.
- Taking our discussion towards the debt portion of the company, then we can witness the debt level of around Rs. 93,000 Cr. mainly due to its JLR business.
- Compared to the strongest peer of Tata Motors in the market i.e., Maruti Suzuki, then here Maruti Suzuki reports revenue worth Rs. 1 Lakh Cr. during the trailing twelve months and market capitalization ranges around Rs. 2.6 Lakh Cr. yielding Price to Sales Ratio of 2.6 times. A similar ratio is 1.42 times for Tata Motors, as the company’s market capitalization stands at Rs. 1.42 Lakh Cr. against sales of the trailing twelve months of the consolidated business is around Rs. 2.78 Lakh Cr.
- Plans of Tata Motors related to EV:
o Recently Launched Tiago EV
o Launching of Altroz and Punch EV
o Launching of EV in the Affordable Range category
o Aims to sell 50,000 EVs during FY23; grab around 10% of the volume share of EV sales in FY23.
o An ambitious target of reaching sales of 1,00,000 EVs in FY24 taking up the share to 15%-20%.
o By 2025-27, the company wants a consistent 30% share in total sales.
What Should Investors Do?
From the current standpoint and with the long-term vision of the company, it may aim to reduce the debt of the company gradually over the period. Tata Motors has received the majority of its premium valuation owing to its India business which comprises of Electric Vehicle segment as well. The investment of private equity firm TPG into the Tata Motors EV business is also boosting factor for the investor. Further, the first mover advantage of Tata Motors in the EV segment might also prove beneficial for the company in the coming period. One should primarily focus on the India business of the company. Follow due diligence before making any investment decisions.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.
Originally Published On:
https://blog.investyadnya.in/tata-motors-launches-affordable-ev-in-india-will-it-be-a-game-changing-strategy/
Download
