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Tata Motors - Lagging The Electrification Trend; ‘Chips’ Are Down: Nirmal Bang Initiates Coverage

Tata Motors - Lagging The Electrification Trend; ‘Chips’ Are Down: Nirmal Bang Initiates Coverage

<div class="paragraphs"><p>A Tata Nexon EV at a charging station operated by Tata Power Co. Ltd. (Source: Company website)</p></div>
A Tata Nexon EV at a charging station operated by Tata Power Co. Ltd. (Source: Company website)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

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).

Click on the attachment to read the full report:

Nirmal Bang Tata Motors- Initiating Coverage- 20 August 2021.pdf

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