Tata Motors Electric Vehicle fully charged to ride the bull rally!

Tata Motors is the unstoppable favourite of the Indian market these days.

Tata Motors stock price rallied approximately 279 per cent, rising from Rs 126 per share to around Rs 500 levels in the past year. 

Such a rally on the bourses is on the back of the strong sales numbers of the company as the demand is seeing a fresh revival in the recovery phase of the post-pandemic era. 

The Tata Motors Group global wholesales in Q2 FY22, including Jaguar Land Rover, were at 2,51,689 higher by 24 per cent, as compared to Q2 FY21.  

The automotive giant did share its concerns on the global semi-conductor shortage on production which consequently resulted in constrained retail sales numbers.  

Such concerns were shadowed by the market exuberance on the news of investment up to Rs 7500 crore by TGP Rise Climate into a wholly-owned subsidiary of Tata Motors (TML EVCo), proposed to be incorporated, to undertake its passenger electricity mobility solutions business. The investment by TPG will get between 11 per cent and 15 per cent share against compulsorily convertible shares, valuing the new entity at about USD 9.1 billion. 

  The company is leading the EV Revolution in India enjoying 70 per cent of the EV market share (FY 21) and owner of the number one EV model- Tata Nexon EV. The company foresees exponential growth in the EV market on account of favourable government policies and the steep rise in fuel prices leading to higher running costs. Tata Motors plans to Introduce 10 new EVs (by FY 26), catalyze charging infrastructure, invest proactively in drive trains, products and platforms. 

The proposed investment by TGP will be used to partly fund investment of USD 2 billion (over Rs 16,000 crore) in the next five years by TML EVCo in expanding its EV business. 

Final Thoughts: 

TPG investment in the EV segment, strong future potential in the EV space, positive quarterly wholesale numbers, strong order book in the luxury car segment and extra bullish market sentiment has led to a huge rally in Tata Motors in the recent past and is expected to continue in the foreseeable future for the market leader in commercial and passenger vehicles. 

The shares of Tata Motors opened today at 532.40, at a 52-week high which later saw some profit booking. The stock is currently trading at Rs 498.50 at 11.57 am.