Tata Motors Demerger and Strategic

1. Immediate Impact on Valuation Approach: – The demerger of Tata Motors Ltd (TTMT) into commercial vehicle (CV) and passenger vehicle (PV) businesses may not immediately alter the Street’s valuation approach. – This is attributed to the well-run nature of India CVs, Jaguar Land Rover (JLR), and PVs, alongside good disclosures.

Medium-Term Strategic Freedom: – In the medium term, individual businesses can pursue their strategies with greater autonomy, potentially leading to value creation.

Potential of Tata Motors PV Business: – Significant potential of Tata Motors’ PV business, noting its remarkable turnaround post-2020 with a notable increase in market share. – The focus on safety, attractive design, and feature-rich vehicles has been instrumental in this growth trajectory.

1. Long-Term Goals and EV Penetration: – Tata Motors aims to become the second-largest PV player in India by FY25-26F and is actively driving electric vehicle (EV) penetration in India. – With ambitious plans to introduce 10 EV models by FY26 and achieve 50% of volumes from EVs by 2030, substantial value creation is expected if successful.