200 per cent returns and FIIs increase stake: Rakesh Jhunjhunwala’s multibagger stock announces demerger into two separate companies!

The demerger is expected to unlock significant collaboration opportunities between PV, EV, and JLR.

Tata Motors is set to demerge into two separate listed companies, aiming to empower individual business units and unlock further growth potential. One entity will hold the commercial vehicle (CV) business, while the other will house the passenger vehicle (PV) business, including electric vehicles (EV) and Jaguar Land Rover (JLR).

This strategic move follows the successful implementation of distinct strategies for each segment. With independent operations since 2021, the demerger aims to further empower them to pursue individual growth paths and increase agility.

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While synergies between CV and PV are limited, the demerger is expected to unlock significant collaboration opportunities between PV, EV, and JLR, particularly in areas like electric vehicles, autonomous driving, and vehicle software development. This strategic restructuring positions Tata Motors for future success by allowing its diverse business units to flourish in their respective markets.

In Q3FY24, the company posted a 25.08 per cent increase in its consolidated revenue at Rs 1,09,799.22 crore compared to Rs 87,783.21 crore from the previous year’s corresponding quarter. The operating profit of the company stood at Rs 16,917.17 crore, while the PAT of the company stood at Rs 6952.17 crore, from Rs 2939.78 crore last year in the same quarter. 

Tata Motors is India’s largest automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, South Africa, and Indonesia. Among them is Jaguar Land Rover, the business comprising the two iconic British brands. The stocks have gained over 20 per cent in the last three years and FIIs increased their stake in the company in December 2023.

The stock has shown impressive growth, and investors should keep a close eye on this stock.

Disclaimer: The article is for informational purposes only and not investment advice.