Tata Motors Share Price

Tata Motors share price target : PV or CV, which biz may create more value?

Tata Motors may be aiming to become the second-largest PV player in India by FY25-26. Nomura cited recent reports that suggested Hyundai Motor India was exploring a potential IPO in India. 

 Nomura India on Tuesday said the demerger of Tata Motors Ltd (TTMT) into commercial vehicle (CV) and passenger vehicle (PV) businesses may not result in any immediate change in the Street’s valuation approach.

 This is because India CVs, JLR and PVs are being well-run and have good disclosures, it said. However, in the medium term, Nomura believes, the businesses should be able to pursue their respective strategies with greater freedom.

 "In particular, we believe Tata Motors PV business has more potential to create value over the next few years. Its PV business has seen a remarkable turnaround after 2020 with market share ramping up from mid-single digits to 13.5 per cent as of 9MFY24. This, in our view, has been driven by its focus on safety, attractive design, and feature-rich vehicles.

 We had earlier expected that TTMT might have two models among the top 3 SUVs in India," Nomura India said. The foreign brokerage said Tata Motors may be aiming to become the second-largest PV player in India by FY25-26F.

 It said Hyundai Motor India was exploring a potential IPO in India at a valuation of $22-28 billion, but noted that Hyundai does make much higher margins. For now, Nomura India suggested an unchanged target price of Rs 1,057 on Tata Motors.