TATA Motors is by far one of the oldest companies in India. TATA Motors has had a dominant market share of 43% in the Indian Commerical Vehicles. But from 2016–2020, the stocks were in a cleft stick. However, since 2020 prices have rallied to new heights, and the latest figures are beyond belief!
The prices rallied more than 10% on 7th October and have increased by 29% since the last month even though 82% of its business is still in the woods. So what is causing such a hike? Let’s find out!
Lately, there has been a semiconductor chip shortage all around the world. This chip is crucial to vehicles, but the supply chain has taken a big hit with the deficit. So much so that Maruti Suzuki had to cut its output by 40%. There has been a similar case for other companies as well. For TATA Motors, 82% of its revenue came from its international subsidiary, the Jaguar Land Rover (JLR).
As BusinessInsider reports,
However, this optimism was not born overnight. Since the end of March 2019, the company has worked hard to increase its share in passenger vehicles from 7% to 10% at the end of June this year, in a market dominated by Maruti, Hyundai and its sister company Kia. Tata Altroz, Tata Tiago and Tata Nexon were some of the successful Tata models that drove this growth.
To top all of it, Electric Vehicles have taken a hit in the last six months. So the good news? TATA Motors has a market share of 70% among the EV Makers in India. TATA Motors EV business has grown three-fold within the last 12 months.
As Hindustan times quotes,
Tata Motors has recorded an increase of more than 20 percent in its passenger vehicle sales in September. The carmaker sold 25,730 units last month, compared to 21,199 units it sold during the same period last year.
According to the analysis of Morgan Stanley, the company’s Indian business will begin to post profits by the end of March 2023, after eight years of losses. The Indian industry may form close to 17% of the group’s earnings in the following year. Besides, Morgan Stanley has upgraded Tata Motor’s rating and raised the target price to Rs 448 from Rs 298 earlier.
So yeah, all in all, it is an excellent time to ‘buy’ TATA Motors shares, and Motilal Oswal Securities has also maintained a ‘buy’ rating for the Tata Motors stock with a target price of Rs 400 per share.
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