Tata Motors zooms to a $25 billion market cap
Focus on SUVs, updated designs, and India's insatiable love for bigger cars has helped Tata Motors' market value breach $25 billion as of July 2024, making it the hottest stock in mobile-town at this point.
The big picture: India's largest carmaker is capitalizing on two major trends – India's strong consumption that is keeping the auto market under focus, and a global shift towards electric vehicles, which Tata was early to recognize.
Tata's game in the numbers
- Market cap of ~$25 billion as of mid-2024, up 86% over the year
- Sold 50,000 EVs in 2023, owning 80% of India's EV market.
- Tata's ~48% market share in India's medium and heavy trucks has also helped stabilize the core business
- Sold 3.3 million vehicles in FY 2023, generating ~$44 billion in revenue.
Why it matters: the traditional auto industry is looking at an uphill battle as the EV transition looms, and Tata's success demonstrates a successful pivot is indeed possible if you play with a cohesive strategy. The company's global presence, with the Jaguar Land Rover operation, also brings under focus India's growing economic clout and manufacturing prowess.
- Jaguar Land Rover (JLR), Tata's luxury vehicle subsidiary's revenue increased by 22% in Q3 FY2024 compared to the previous year.
Despite the smooth ride so far, there are challenges the business has to still overcome. Global economic uncertainties, with potential recession risks in key market could dent the company's path. Moreover, intensifying competition could further put pressure, hurting volumes and profitability.
The bottom line: Analysts are more bullish, expecting the stock to go even higher and offering a $30 billion in market cap by 2025.
