Reduce Tata Motors; target of Rs 950: Emkay Global Financial

Emkay Global Financial's research report on Tata Motors

TTMT’s board approved the proposal to demerge the company into two separate listed entities, viz a) CV and its related investments and b) PV, including India PV, EV, JLR, and related investments. This comes across as a logical progression of separate reporting of the CV and India PV financials run by their respective CEOs (since 2021). We believe this signifies management’s confidence that the two businesses can operate independently with self-sustaining cash flows.

Outlook

While we do not envisage major fundamental changes (as both businesses were run independently), we upward revise our SOTP-based TP marginally to Rs950 (vs. Rs925 earlier) as we factor in 10% premium multiple to TTMT’s CV business (vs AL IN) for potential pure-play optionality on CVs with higher scale. Downgrade to REDUCE as recent run-up leaves limited upside.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Tata Motors - 05032024 - emkay