Tata Motors - Lagging The Electrification Trend; ‘Chips’ Are Down: Nirmal Bang Initiates Coverage
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Nirmal Bang Report
We see a strong turnaround in Tata Motors Ltd.'s commercial vehicle and passenger vehicle businesses being mostly factored into the stock price.
But, we anticipate broader market expectations about Tata Motors' Jaguar LandRover’s revival plans and medium-term strategy to be overly ambitious.
We see JLR’s electrification strategy significantly lagging the global electrification trends (~38-40% of global electric vehicle sales are premium; of which JLR’s market share is less than1%).
We see accelerated transition to EVs by competitors denting JLR’s market share and profitability.
We also believe that JLR has limited capabilities for an accelerated EV push (higher investments) given its already stretched operating metrics (guidance of sustainable free cash flow positive only from FY24E and net cash positive in FY25E).
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