Stock in Action – Tata Motors Ltd

Movement of the Day

Analysis 

1. Price above short, medium and long term simple moving averages.
2. Company is expected to give good quarter.
3. company has delivered a poor sales growth of 3.48% over past five years.
4. Company has a low return on equity of -7.15% over last 3 years.

Probable Rationale Behind Tata Motors' Stock Surge

I. Electric SUV Market Growth: The surge in Tata Motors' stock can be attributed to the company's strategic focus on electric SUVs, aligning with the rapidly growing electric SUV market in India.

II. Market Trends

Electric SUVs Dominance: Electric SUVs have witnessed a substantial increase in market share, from 1.3% in CY 2018 to 40.8% in CY 2023, showcasing a shifting consumer preference towards sustainable and technologically advanced vehicles.
SUV Segment Growth: The SUV segment is the fastest-growing in India, driven by factors such as increased disposable incomes, spaciousness, and perceived safety, creating a favorable market for electric SUVs.

III. Tata Motors' Electric SUV Lineup

1. Punch EV Launch (February 2024): Priced at Rs 9.5 lakh, making it the most affordable battery-powered SUV in India.
2. Harrier EV Launch (June 2024): Priced at Rs 22 lakh, targeting the mid-range electric SUV market.
3. Curvv Coupe EV Launch (December 2024): Positioned at Rs 22 lakh, offering a competitive choice in the electric SUV segment.
4. Sierra EV Launch (November 2025): Highest priced model at Rs 25 lakh, catering to the premium electric SUV market.

IV. Mahindra & Mahindra's Electric SUV Plans

XUV.e8 and XUV.e9 Production:

1. XUV.e8 production starts in December 2024 (around Rs 35 lakh).
2. XUV.e9 production begins in April 2025 (around Rs 40 lakh).

Concept Models Production:

1. Production of concept models BE.05 and BE in October 2025.
2. Production of BE.07 in October 2026.

V. Market Positioning  

1. Tata Motors as Largest EV Player: Tata Motors currently holds the largest market share in the EV segment.
2. M&M's EV Portfolio Expansion: Mahindra & Mahindra aims to convert 20-30% of its portfolio to electric by 2027.

VI. Electric SUV Market Dynamics

JATO Dynamics India Data: Electric SUVs accounted for 40.8% of overall electric passenger vehicles in CY 2023. Higher pricing of e-SUVs compared to ICE counterparts contributes to potentially higher margins.

VII. Tata Harrier EV Features    

1. Impressive Range: Tata Harrier EV claims a 500km range on a full charge.
2. Technological Advancements: Features include a 10.25-inch infotainment screen, fully digital color instrument cluster, and various connectivity and comfort options.

VIII. Tesla's Impact

Tesla's Entry into India: Tesla's announcement of establishing its first factory in India has contributed to overall positive sentiment in the electric vehicle sector.

IX. Conclusion

Investor Confidence: Tata Motors' strategic focus on electric SUVs, aligned with market trends and consumer preferences, has bolstered investor confidence.
Sustained Growth: The company's diverse electric SUV lineup and commitment to sustainability position it favorably for sustained growth in the evolving EV market