Shares of the company have reached a new high after reports of investment of about Rs 7500 crore by the giant equity firm TPG in Tata Motors’ E-Vehicle Venture. However, on Friday, it had declined by 2 per cent to Rs 496.60. In fact, Tata Motors (TTML) has increased its capabilities significantly but its valuation is still in the slow-lane. So it has a huge option value. The company’s passenger vehicle business has shown these possibilities. According to Edelweiss, the market is currently eyeing the performance of Jaguar Land Rovers, hence it is being given a ‘BUY’ rating with a target price of 539. Earlier the target price was Rs 397.
Tata Motors to benefit from e-vehicle market
TPG and ADQ will invest Rs 7500 crore in the electric-vehicle segment of Tata Motors. Tata Motors has so far invested 1500 crores in this business. Apart from this, it will spend Rs 15,000 crore in launching electric-vehicles for the next two years. Together with Tata Power, it will also set up electric-vehicle infrastructure in the country. Looking at the current conditions, Tata Motors’ e-vehicle business may reach breakeven in 2022-23. In the next five years, the market share of e-vehicles can be 10 per cent and the market share of the company can increase to 20 per cent.
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TPG deal strengthens Tata e-vehicle business
The demand for Tata Motors in India and JLR in the overseas market can increase significantly. TPG’s deal will further strengthen its electric-vehicle business. Therefore, its target price has been increased from Rs 397 to Rs 539. It has been rated BUY. During the last one week, this stock has seen a rise of more than 20 percent. It may see more speed in the future.
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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