Tata Motors gets ‘overweight’ rating from JPMorgan for ‘self-help’ story


JPMorgan is ‘overweight’ Tata Motors Ltd., betting on ‘the automaker’s commitment to balance sheet deleveraging’ and ‘structural strengthening of its business – India and Jaguar Land Rover’.

The maker of the Tiago and Safari can achieve its goal of net zero debt by FY24 by continuing to execute its “self-help” strategies, the research house said in a Feb. 16 note as she threw a cover on the title.

These strategies include:

  • Improve the mix towards the most profitable Land Rovers and right-size costs in JLR to boost free cash flow.

  • To have market share gains induced by the launch of models in the passenger vehicle segment in India.

  • Strengthen its leadership in utility vehicles during a cyclical recovery.

Tata Motors, he said, also leads the nascent electric vehicle segment – ​​1% penetration in India – in passenger vehicles with an 80% market share. The company has announced a fundraising of Rs 7,500 crore from TPG for its new EV subsidiary. The UK-based JLR is also improving on electrification.

JPMorgan has set a price target of Rs 630 each for Tata Motors, implying a 26% upside from current levels. In its bullish fair value, the stock could still reach Rs 783, up 57%, if Tata Motors continues to be a leader in electric passenger vehicles in India and meets JLR’s medium-term targets.

Separately, JLR said in a statement that it has formed a multi-year strategic partnership with Nvidia to jointly develop and deliver next-generation automated driving systems and artificial intelligence-based services. From 2025, all new JLR vehicles will be built on an Nvidia Drive software-defined platform.

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