On Wednesday, JPMorgan reiterated its Overweight rating on Tata Motors (NYSE:TTM) Ltd. (TTMT:IN) (NYSE: TTM) stock with a steady price target of INR1,115.00. The firm's analyst highlighted the company's strategic plans revealed during Tata Motors' India Investor Day, which took place on Tuesday.
The detailed roadmap included Tata Motors' medium-term strategy for its India operations, encompassing both Commercial Vehicles (CV) and Passenger Vehicles (PV), with a significant focus on electrification.
Tata Motors has committed to disciplined capital allocation and rigorous execution as it moves forward. The company is in the process of a de-merger that is expected to be completed within 12 months following board approval of the National Company Law Tribunal (NCLT) scheme. Post de-merger, Tata Motors plans to concentrate on maintaining product relevance.
In the Passenger Vehicles segment, Tata Motors is aiming for volume growth that surpasses the industry average. The company's goal is to increase its market share to 16% by the fiscal year 2027 and further to 18-20% by fiscal year 2030. For its Electric Vehicle (EV) business, Tata Motors targets over 30% EV penetration by 2030 and aims to achieve a break-even point on EBITDA by the fiscal year 2026. The company has allocated a dedicated capital expenditure of Rs 160-180 billion from fiscal years 2025 to 2030 for this purpose.
The Commercial Vehicles business is not being overlooked, as Tata Motors strives for revenue growth that outpaces the industry, coupled with an improvement in market share. The analyst's comments underscore the company's strategic initiatives aimed at strengthening its position in both its traditional automotive and electric vehicle markets.
In other recent news, Tata Motors has retained its Outperform rating, with a steady price target of INR 1,181. This affirmation follows the company's investor day, where it highlighted strategies to increase market share in both the passenger vehicle and commercial vehicle segments, along with initiatives to improve Ebitda margins. The company's strategy includes launching new products and implementing cost reduction measures, aiming to strengthen its market position and enhance profitability.
In related developments, Goldman Sachs has increased Tata Motors' price target and maintained a Buy rating, anticipating the company's upcoming fourth-quarter earnings for fiscal year 2024.
The revised price target reflects factors such as product mix updates, pricing strategies, currency fluctuations, and volume seasonality, leading to a forecasted increase in earnings per share for fiscal years 2025 and 2026 by up to 6%.
The company's strategic price increases in the commercial vehicle segment and the depreciation of the Indian Rupee against the British Pound by 1.9% quarter-over-quarter have factored into these new estimates. Furthermore, the market reception for the newly launched Punch EV contributed to the improved average selling price. These are the recent developments for Tata Motors.
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