BackTata Motors shares: Jefferies sees upto 40% upside on strong focus on EVs
The launch of electric ACE further underlines Tata Motors' strong focus on the EV space, said Jefferies
PremiumJefferies continues to like Tata Motors' EV strategy, which it believes should boost its market share as electric vehicle (EV) adoption rises. : India is in nascent stages of electrification with EVs forming just ~1% of passenger vehicles. Tata has taken an early lead though with EVs now contributing ~7% of its India PV volumes CYTD.
The ACE EV is Tata Motors' first product on a new electric powertrain (called EVOGEN), its its top-selling small commercial vehicle. The EV is targeted at intra-city applications like ecommerce delivery, and has been developed in close collaboration with potential users, Jefferies' highlighted. Tata received good initial response with MOUs for 39K vehicles from leading e-commerce and logistics companies.
“The launch of electric ACE further underlines Tata's strong focus on the EV space, extending the technology to small commercial vehicles. We continue to like Tata's EV strategy, which we believe should drive market share gains for the company as EV adoption rises in the country," the note stated.
The brokerage has Buy rating on Tata Motors shares with target price of ₹540, with upside scenario price target of ₹605 (implying over 40% upside potential) and downside scenario target of ₹325.
Tata Motors intends to expand its electric PV portfolio from 2 EVs presently to 10 by FY26, and the recent investment by TPG provides it the balance sheet strength to drive electrification.
In October last year, The Tata Group's auto arm had said that TPG Rise Climate fund will lead investment in the automaker's new company that will house its passenger electric vehicle business. Shares of Tata Motors have surged over 41% in a year's period, however the Tata Group stock is down about 15% in 2022 so far.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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