Earlier this year, Tata Motors revealed plans to split into two distinct companies: one dedicated to its commercial vehicle operations and the other focusing on passenger vehicles, including Jaguar Land Rover (JLR).
Tata Motors has achieved a significant milestone by joining the ranks of the top 10 most valuable automobile companies globally, becoming the first domestic automaker to reach this status. With a market capitalization of $51 billion, Tata Motors, which owns the luxury Jaguar and Land Rover (JLR) brands, is now valued higher than Stellantis, known for brands like Peugeot, Citroën, and Chrysler, as well as General Motors, which owns Chevrolet, GMC, Cadillac, and Buick. The company’s shares have surged nearly 50% this year, the highest among the top 10 global automakers. This remarkable growth has helped close the valuation gap with competitors like Honda Motors, Volkswagen, and BMW.
Recently, Nomura raised its price target for Tata Motors from ₹1,141 to ₹1,294, maintaining a ‘buy’ rating. This target price suggests a 12% potential upside from current levels. The brokerage highlighted that effective execution by JLR could drive significant stock gains. Additionally, the planned demerger is expected to unlock value for the commercial vehicle segment, prompting Nomura to re-rate the stock at 11 times its enterprise value-to-EBITDA, up from 10 times.
Earlier this year, Tata Motors announced its plan to split into two separate entities: one for its commercial vehicle business and another for its passenger vehicle operations, including JLR.
In May, the company also received shareholder approval for a scheme to convert A-shares into ordinary shares. This scheme, first introduced in July 2023, involves issuing seven ordinary shares for every ten A-ordinary shares held. The initiative aims to streamline and consolidate the company’s capital structure in preparation for the demerger.
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