Tata Motors
Tata Motors
Global carmaker Tata Motors saw its shares jump 8% in early trade today, crossing a key milestone of ₹1000 to settle at ₹1065.60 per share This notable improvement in Tata share price followed investor interest generated by the company’s strategic decision to spin off its commercial passenger car business into two separate listed companies a move aimed at enhancing the company’s ability to effectively exploit growth opportunities. On Monday, the company approved the proposal to spin off Tata Motors, splitting it into two separate listed companies. The first company will include the commercial vehicle business and related investments, and the second will include the passenger car segment that includes PV, EV, JLR and related funds
Over the past few years, Tata Motors’ Commercial Vehicles (CV), Passenger Vehicles (PV+EV), and Jaguar Land Rover (JLR) business units have been successful in specific strategies and have been performing aggressively from 2021, those industries these operate independently under their CEOs, the company changed -He said in the file. The merger will be implemented through an NCLT regulatory process, and all shareholders of Tata Motors will retain equal stakes in the two listed companies. Commenting on the company’s spin-off plan, Mr. Ashwin Patil, principal research analyst, LKP Securities, said,” The announcement of the merger between Tata Motors’ two businesses CV and PV will split the business value.” two must enable a focused approach and flexibility. Also both services are not connected.” That explains the move.”
Their volume performance, margins, drivers and competitors are quite different. So it’s a smart move for a company that’s been on the anvil for a while now. From a competition perspective, he said the PV business can now compete directly with market leader Maruti in the form of global guns of JLR and plug the upfront pricing gap. Read Also: Tata Motors Breakup: Will Shareholders See Value Unlocked? Researchers weighed the impact With Hyundai listed on the cards as M&M’s fourth competitor, it will be interesting to watch the struggle in the PV space and could give the investor a fair choice among the four, he pointed out.
On the CV front, Ashwin Patil said that Tata Motors will compete straightaway with pure-play domestic player Ashok Leyland. He believes better cash utilisation should add to the positive sentiments.
“Since it’s an equal split, we can’t take a call on valuations. We stay positive on the stock,” he added.
Stellar Rally
Over the past year, the company’s shares have been on a steady upward trajectory, buoyed by notable improvements in its Jaguar and Land Rover as well as commercial vehicle businesses. Following seven consecutive quarters of losses, the company pivoted to a net profit in Q3 FY23, a trend that continued in subsequent quarters, fueling an exceptional rally in its stock price.
Having ended CY23 with a multi-bagger return of 101%, making it the only Nifty 50 stock to achieve this feat during the year, the positive momentum continues into CY24, with the stock posting a profit of a it’s astounding with almost 36% given already . Considering the stock’s low price of ₹79.60 per share on May 20, it has gained an impressive 1193% to trade at ₹1030 per rupee at the current market price Notably, has closed in the green for 9 months out of the last 11 months , It gave an exceptional return of 145%. Disclaimer: We advise investors to consult certified experts before making investment decisions.