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Imagine a bustling jewellery market teeming with diamonds and gold. Amidst this glittering chaos, a small stall is trying to sell handcrafted gemstones. Even as newer and shinier outlets keep cropping up, all vying for attention, this gemstone store offers some of the oldest yet valuable jewels at a discount. Though they lack immediate sparkle, these rare gems reveal their value to the discerning buyer. This is how South Korea appears for many experts in global capital markets: a trove of undervalued gems, overshadowed by brighter, more aggressively marketed investment options. This undervaluation, known as the "<keyword id="24399183" type="General" weightage="20" keywordseo="korean-discount" source="keywords">Korean Discount</keyword>," reflects how South Korean companies are priced much lower than their global peers despite robust fundamentals — strong financial performance and consistent profitability. Contributing factors are many, ranging from opaque governance structures to geopolitical risks. But the fact stays, if you are a seasoned conglomerate listed in South Korea, you are likely undervalued. <keyword id="19906087" type="General" weightage="20" keywordseo="hyundai" source="keywords">Hyundai</keyword> Motor India Ltd. (HMIL), a subsidiary of the Korean giant Hyundai Motor Company (HMC), recently sought to escape this valuation trap by listing in India, a market where investor optimism commands premium pricing. But its valuation raised many eyebrows! Now that a month and a half has gone by since its listing, time is apt to examine if this gamble paid off. Will <keyword id="93460" type="General" weightage="100" keywordseo="hyundai-india" source="Orion">Hyundai India</keyword> justify its high valuation? Or does the listing highlight broader questions about the overheated valuation dynamics of Indian markets? A record-breaking <keyword id="19898327" type="General" weightage="20" keywordseo="ipo" source="keywords">IPO</keyword> but questions remain Hyundai Motor India’s mega Initial Public Offering (IPO), launched in October 2024, broke records by raising ₹27,870 crore, making it India’s largest-ever IPO. The offer was oversubscribed by 2.37 times, highlighting robust demand. But many investors remained sceptical: was this IPO an honest attempt to expand Hyundai’s footprint in India or was it trying to offer a way to cashout for existing investors and promoters? Or perhaps, is it an attempt by the Korean chaebol — a large family-owned business conglomerate — to break free from the aforementioned “Korean Discount”? When shares listed on October 22, these concerns seemingly weighed on the minds of most investors and the stock promptly dipped 5% below the issue price on the day. A tepid grey market performance had already foreshadowed this muted debut in the Indian markets. Now, after almost 35 trading sessions on Indian market, the stock remains almost exactly at price it listed on October 22 at Rs 1820—no gain, no loss. <h3>The gamble of hyper-valuation</h3>Much of this hesitation stemmed from Hyundai’s valuation. On listing, Hyundai was valued at $18 billion, positioning it as one of India’s most valuable automotive companies. However, such high valuations often temper investor enthusiasm, resulting in more cautious short-term outcomes. For most investors, the Price-to-Earnings (P/E) ratio is the most preferred parameter to gauge if a company is overvalued or undervalued. With a P/E ratio of 26.3, HMIL was priced significantly above the Indian automotive industry average of 24.4. Globally, automotive companies operate with much lower P/E ratios, reflecting mature market conditions and slower growth trajectories. HMIL’s South Korean parent Hyundai Motor Company (HMC) trades at a meagre 3.07, believe it or not! For Indian investors, the high premium hinted at overvaluation despite Hyundai’s strong domestic position. Such stark difference in valuation obviously sparked debates — is the Indian market assigning a premium to Hyundai Motor India’s growth potential, or is it simply reflecting the general exuberance around the prospects of the Indian economy? Another concern is the allocation of IPO proceeds. Hyundai’s IPO was structured as an offer for sale (OFS), meaning all funds raised would flow to the parent company rather than Hyundai India’s operations. Although Hyundai has committed to investing in R&amp;D for EVs and hybrids, critics argue that the lack of immediate reinvestment in India’s operations reflects a missed opportunity for domestic growth. Despite the early disappointment, Hyundai was confident that the valuation was fair. It did have some factors going for it, in addition to the fact that other auto giants like Mahindra &amp; Mahindra and <keyword id="19909974" type="General" weightage="20" keywordseo="maruti-suzuki" source="keywords">Maruti Suzuki</keyword> command even higher P/E ratios. And looking at the company fundamentals, it does seem like Hyundai is playing a long-term game. <h3>Hyundai in India: A proven track record</h3>Despite the initial stumble, Hyundai India’s long-term story is compelling. Since entering the Indian market in 1996, the automaker has sold over 8 million vehicles and firmly occupies the second spot in the domestic passenger vehicle market, trailing only Maruti Suzuki. Hyundai’s blockbuster SUV offerings, like the Creta and Venue, have been critical in building this dominance. Despite some challenge from Maruti Suzuki Brezza and Tata Punch, Creta has retained the tag of ‘most-selling SUV in India’ successfully so far this year. <div type="image" title="Hyundai" agency="Business Insider India" msid="116156234" hostid="261" caption="&amp;lt;p&amp;gt;Selling over 17,000 units per month on average this year, Creta has edged past major competitors to be the most-selling SUV in India in 2024. As Indian consumers preference continues to shift gradually towards premium products over budget segments, Hyundai stands to benefit (Wikimedia Commons / Canva)&amp;lt;/p&amp;gt;"></div> Selling over 17,000 units per month on average, Creta has edged past major competitors to be the most-selling SUV in India in 2024. As Indian consumers preference continues to shift gradually towards premium products over budget segments, Hyundai stands to benefit (Wikimedia Commons / Canva) Hyundai India’s market share of 14% in October 2024 underscores its clout. The company’s ability to tap into India’s premiumisation trend, where consumers increasingly prefer high-end vehicles, positions it well for growth. With plans to expand in electric vehicles (EVs) and hybrid technology, Hyundai is poised to capitalise on both domestic demand and export opportunities. The company’s ability to capitalize on its strong brand, extensive dealer network, and leadership in segments like SUVs and exports will determine its future performance. Hyundai’s strategic focus on expanding electric vehicle production also aligns with global trends towards sustainability, potentially positioning it as a leader in the segment. By listing in India, Hyundai aims not only to expand its operations but also to make India a global manufacturing and export hub for its products, especially SUVs and EVs. Therefore, despite early setbacks, Hyundai’s gamble seems to have paid off. The stock has rebounded, gaining 5% in the past month. More good news came in this week, as positive projections from Morgan Stanley and JPMorgan forecast an impressive 17-28% upside for the stock over the next year, reflecting growing investor optimism. <h3>A strategic pivot from the Korean Discount?</h3>The Korean Discount has long plagued South Korea’s chaebols, including Hyundai. Experts attribute this to several factors: <ul> <li>Chaebol Governance: South Korea’s conglomerates, known as chaebols, are often criticised for opaque governance structures and excessive family control.</li> <li>Geopolitical Risks: Tensions with North Korea contribute to investor caution, adding a layer of perceived risk.</li> <li>Limited Domestic Liquidity: South Korea’s relatively small investor base can constrain market activity and valuation potential.</li> </ul> By listing in India, Hyundai sought to unlock better valuations for its subsidiary, leveraging the optimism of Indian markets. India’s stock market has a trailing P/E ratio of 24.4, far above South Korea’s Kospi average of 16-17. The Indian market’s appetite for high-growth stories provides a fertile ground for companies like Hyundai to escape the valuation constraints of their home market. A successful IPO could encourage other such conglomerates to follow suit, setting a precedent. While Hyundai India has a robust track record, its future success hinges on navigating key challenges: <ul> <li>Supply Chain Vulnerabilities: Hyundai relies heavily on its Chennai plant, making it vulnerable to disruptions.</li> <li>Intensifying Competition: Domestic rivals like <keyword id="19906967" type="General" weightage="20" keywordseo="tata-motors" source="keywords">Tata Motors</keyword> and MG Motors are making aggressive inroads into the EV market.</li> <li>Policy Risks: The automotive sector’s reliance on government incentives for EVs and hybrids adds a layer of unpredictability.</li> </ul> High valuations come with risks. Hyundai will need to prove that it can sustain its growth trajectory in India, fend off competition from established players like Maruti Suzuki and Tata Motors, and navigate challenges such as supply chain disruptions and regulatory hurdles. If Hyundai successfully capitalises on its strong brand and market leadership, it could not only redefine its value but also serve as a case study for other Korean companies seeking better recognition and valuations in global markets. <h3>Is Hyundai saga a reflection of overheated Indian markets?</h3>The bigger question here is, does Hyundai’s IPO highlights a broader narrative about Indian markets’ premium valuations? With a trailing P/E ratio of 24.4, Nifty 50 index is among the highest in emerging markets. India’s stock markets consistently command a premium due to robust retail participation, strong economic growth prospects, and a burgeoning middle class. While this premium reflects optimism about India’s long-term growth story, it also signals potential risks of overvaluation, particularly in sectors like technology, automotive, and consumer goods. With a record ₹94,017 crore outflow by Foreign Portfolio Investors (FPIs) in October 2024, concerns about overheated valuations are mounting. Sustaining such unprecedented valuations required companies to consistently perform above global averages, and retaining robust earnings growth quarter after quarter remains a challenge in today’s uncertain world. For Hyundai, the high valuation is both an opportunity and a risk. While it underscores investor confidence, it narrows the margin of safety, making the stock vulnerable to corrections during economic downturns. Take for example, the high-profile IPO of Life Insurance Corporation of India (LIC) that raised over ₹21,000 crore. Its listing was met with disappointment as the stock began trading at a 9% discount to its issue price, and subsequent performance has remained subdued. LIC’s post-IPO journey also highlights how inflated valuations can lead to long-term underperformance, as the stock gave only 12% return over the past 30 months when even the Nifty 50 index went up by over 44%. This happens when when the company's growth narrative fails to align with its pricing. Despite being a household name with a dominant market share, LIC's stock has struggled to meet expectations, partly due to concerns about its operating efficiency and the limited use of IPO proceeds for growth initiatives. Make no mistake, Hyundai Motor India’s IPO is a landmark event! It showcases the potential for Korean companies to leverage emerging markets like India for better valuations. It also shows that strong fundamentals can help justify a company such premium valuations even amidst bearish economic prospects. However, it also serves as a cautionary tale about the risks of overvaluation. For Hyundai, the next steps involve proving its long-term growth story, navigating competitive challenges, and maintaining investor confidence. For Indian markets, Hyundai’s IPO underscores the need to balance optimism with realistic expectations as they continue to evolve as global investment hotspots. To sustain the country’s economic narrative as a land of unmatched opportunities, corporate India must work on improving long-term fundamentals and mitigating long-term risks. As global investors watch closely, Hyundai India’s success or failure could shape how international companies view India as a listing destination in the years to come.

Tackling the 'Korean Discount': A deep dive into curious case of Hyundai Motor India's market listing

<keyword id="19906967" type="General" weightage="20" keywordseo="tata-motors" source="keywords">Tata Motors</keyword> on Tuesday said its electric vehicle arm has reduced prices of two models -- <keyword id="20563981" type="General" weightage="20" keywordseo="nexon-ev" source="keywords">Nexon.ev</keyword> and Tiago.ev -- by up to Rs 1.2 lakh on account of reduction in battery cost. The auto major has cut the price of Nexon.ev by up to Rs 1.2 lakh and now the model price starts at Rs 14.49 lakh. Similarly, the company has reduced the prices of Tiago.ev by up to Rs 70,000 with the base model now starting at Rs 7.99 lakh, Tata Motors said in a statement. Introductory prices of the recently-launched <keyword id="20078457" type="General" weightage="20" keywordseo="punch-ev" source="keywords">Punch.ev</keyword> remain unchanged as they already factor in reduction in battery cost in the foreseeable future, it added. "Battery costs constitute a substantial part of the overall cost of an EV. "With battery cell prices having softened in the recent past and considering their potential reduction in the foreseeable future, we have chosen to proactively pass on the resulting benefits directly to customers," <keyword id="20078455" type="General" weightage="20" keywordseo="tata-passenger-electric-mobility" source="keywords">Tata Passenger Electric Mobility</keyword> (TPEM) Chief Commercial Officer Vivek Srivatsa said. While EVs have grown rapidly over the last few years, the company's mission is to accelerate the mainstream adoption of EVs by making them more accessible nationwide, he added. EVs have shown a strong growth momentum and are substantially outperforming the overall passenger vehicle industry growth, Tata Motors said. In 2023, the EV segment grew by over 90 per cent against the 8 per cent growth recorded by the PV industry, it said. This growth momentum has continued in 2024 as well with EV sales registering a 100 per cent year-on-year growth in January 2024. TPEM with over 70 per cent market share is the leader in this fast-growing segment, the automaker stated. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/using-ai-to-impress-someone-this-valentines-nearly-50-say-they-will-be-offended/articleshow/107656212.cms">Using AI to impress someone this Valentine’s? Nearly 50% say they will be offended</a><a href="https://www.businessinsider.in/business/webstories/five-out-of-the-top-10-unlisted-companies-in-india-slipped-in-valuation-in-2023/slidelist/107650633.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/webstories/five-out-of-the-top-10-unlisted-companies-in-india-slipped-in-valuation-in-2023/slidelist/107650633.cms" target="_blank">Five out of the top-10 unlisted companies in India slipped in valuation in 2023</a><a href="https://www.businessinsider.in/tech/mobile/news/seven-out-of-top-10-smartphones-sold-worldwide-in-2023-were-iphones/articleshow/107617907.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/seven-out-of-top-10-smartphones-sold-worldwide-in-2023-were-iphones/articleshow/107617907.cms" target="_blank">Apple domination: Seven out of top 10 smartphones sold worldwide are iPhones</a>

Tata Motors cuts EV prices by up to ₹1.2 lakh as battery cost dips

<ul><li> Production at the new gigafactory is due to start in 2026.</li><li><keyword id="6354362" type="General" weightage="50" keywordseo="jaguar-land-rover" source="Orion">Jaguar Land Rover</keyword> will be the anchor customer of the new gigafactory.</li><li>The new gigafactory with an initial output of 40GWh will be one of the largest in Europe.</li></ul> The UK government on Wednesday announced that the <keyword id="6355725" type="General" weightage="80" keywordseo="tata-group" source="Orion">Tata Group</keyword> is to invest over 4 billion pounds in setting up a new electric vehicle (EV) battery plant, or gigafactory, in Britain which will create thousands of jobs across the supply chain. British Prime Minister <keyword id="221875" type="General" weightage="70" keywordseo="rishi-sunak" source="Orion">Rishi Sunak</keyword> hailed it as an "incredibly proud" moment for the country's automotive industry and described it as a testament to the strength of the UK car manufacturing industry and its skilled workers. <keyword id="42747" type="General" weightage="60" keywordseo="tata-motors" source="Orion">Tata Motors</keyword> owns UK-based luxury carmaker Jaguar Land Rover (JLR), which will be the anchor customer of the new gigafactory with an initial output of 40GWh - making it one of the largest in Europe. Production at the new gigafactory is due to start in 2026 and is pitched as a key driver behind Sunak's priority to grow the UK economy. "Tata Group's multi-billion-pound investment in a new battery factory in the UK is a testament to the strength of our car manufacturing industry and its skilled workers," said Sunak. "With the global transition to zero-emission vehicles well underway, this will help grow our economy by driving forward our lead in battery technology whilst creating as many as 4,000 jobs, and thousands more in the supply chain," he said. "We can be incredibly proud that Britain has been chosen as home to Tata Group's first gigafactory outside India, securing our place as one of the most attractive places to build electric vehicles," the British prime minister said. As one of the largest-ever investments in the UK auto industry, the new factory will create up to 4,000 highly skilled jobs as well as thousands of further jobs in the wider supply chain for battery materials and critical raw minerals. The gigafactory will secure UK-produced batteries for JLR as well as other manufacturers in the UK and Europe. The location of the new gigafactory is expected to be in Somerset, south west England. "Our multi-billion-pound investment will bring state-of-the-art technology to the country, helping to power the automotive sector's transition to electric mobility, anchored by our own business, JLR," said N Chandrasekaran, Chairman of parent company Tata Sons. "With this strategic investment, the Tata Group further strengthens its commitment to the UK, alongside our many companies operating here across technology, consumer, hospitality, steel, chemicals, and automotive," Chandrasekaran said. The Department for Business and Trade (DBT) said details of the government's incentives and support provided to the Tata Group as part of the agreement will be published in due course as part of regular transparency data. However, reports in the lead-up to the announcement had indicated subsidies in the form of grants, energy subsidies and other training and research funding would be part of the agreed package. "Today's multibillion-pound investment demonstrates that this government has got the right plan when it comes to the automotive sector," noted UK Business and Trade Secretary Kemi Badenoch. "We are backing the UK car industry to help grow our economy as we transition to electric vehicles, and this latest investment will secure thousands of highly-skilled jobs across the country," Badenoch said. The investment of over 4 billion pounds is seen as a historic moment for the UK's growing electric vehicles (EV) industry, with JLR's suite of <keyword id="91410" type="General" weightage="50" keywordseo="range-rover" source="Orion">Range Rover</keyword>, Defender, Discovery and Jaguar brands as the key customers. The Tata investment is described as crucial to boosting the UK's battery manufacturing capacity needed to support the electric vehicle industry in the long term and the new plant will cover almost half of the battery production that the Faraday Institution estimates the country will need by 2030. "This is a huge vote of confidence in the UK and one that will drive growth in our economy, creating thousands of jobs and powering our transition to electric cars," said UK Chancellor Jeremy Hunt. "Tata Group's gigafactory builds on the strength of our manufacturing industry and shows we're on the right track, backing the sectors that will underpin our future prosperity for decades to come," he said. DBT said the government is committed to making the UK one of the best places in the world for automotive investment, as evidenced by the Automotive Transformation Fund (ATF), the British Industry Supercharger supporting industry energy needs, and the strong programme of support for research and development. "This new gigafactory puts us firmly in the fast lane to becoming the capital of Europe's electric car market, and makes crystal clear how they see the UK as the place to be for their future growth," added UK Energy Security Secretary Grant Shapps. "With thousands of jobs on-site and in the supply chain, this new factory will be the cornerstone of our automotive industry, backing manufacturers to develop and expand, and customers to make the switch from petrol and diesel," he said.

Rishi Sunak hails Tata Group's multi-billion EV investment in UK

<ul><li>Analysts are bullish on <keyword id="42747" type="General" weightage="100" keywordseo="tata-motors" source="Orion">Tata Motors</keyword> thanks to robust performance by the car maker’s British subsidiary, Jaguar Land Rover.</li><li><keyword id="45218" type="General" weightage="80" keywordseo="jlr" source="Orion">JLR</keyword> expects its wholesale volumes to rise 25% in FY24, and its debt to reduce to £2 billion from the existing £3 billion.</li><li>Tata Motors’ domestic businesses also delivered margin expansion, with its net debt falling to ₹6,200 crore in FY23, the lowest in 15 years.</li><li>Robust performance across segments also helped the company declare its first dividend since FY16.</li></ul>Tata Motors is driving in top gear, thanks to a strong performance by its British subsidiary Jaguar Land Rover (JLR) alongside robust execution across segments in its domestic business. It topped street estimates with a <a href="https://www.businessinsider.in/business/auto/news/tata-motors-posts-net-profit-of-5408-crore-in-q4-beats-estimates/articleshow/100189259.cms">consolidated net profit of ₹5,408 crore in Q4</a> and analysts expect the momentum to continue in the new financial year aided by multiple tailwinds. Tata Motors’ robust numbers in the March quarter were aided by JLR’s performance – the UK-based luxury car maker posted free cash flow of £815 million during the quarter. JLR accounts for 80% of Tata Motors’ consolidated revenue, so its strong performance has a large impact on Tata Motors’ performance. In addition, Tata Motors’ domestic business also delivered an improvement in margins across segments, helping the company post its highest-ever consolidated revenue of ₹1.06 lakh crore in Q4, registering a growth of 35% on year. “Tata Motors executed a strong show across key verticals in Q4 FY23 with commercial vehicles earnings before interest, taxes, depreciation and amortisation (EBITDA) margins crossing the 10% mark after 4 years and JLR delivering a strong £815 million free cash flow,” said the analysts at Motilal Oswal. Tata Motors declared a dividend of ₹2 per ordinary share, its first since FY16. The Indian business’ net debt stood at ₹6,200 crore in FY23, which is the lowest in 15 years. The street also celebrated its earnings as its shares rose by 4% hitting a fresh 52-week high of ₹537 a piece before closing at ₹531. <cmsannotation type="cmsannotation" annotationid="The JLR boost" comment="subhead" text="The JLR boost">The JLR boost</cmsannotation> Analysts expect Tata Motors to gain more momentum going forward, thanks to JLR’s healthy order book, softening commodity prices and sustained free cash flow generation. JLR’s volumes surged to 1.07 lakh units in Q4, rising by 20%. In a post-earnings call, the luxury car maker said that its current order book stands at 2 lakh units, and that the overall demand outlook remains healthy. Of this, 1.5 lakh orders are for high-margin cars like the Range Rover, Range Rover Sport and Defender. The company has planned a ramp up of capacities during FY24, with capital expenditure budgeted at £3 billion, up from £2.35 billion in FY23. Overall, JLR is targeting volumes of 4 lakh units in FY24 which is a growth of 25% when compared to FY23’s volumes of 3.21 lakh units. Thanks to improving margins and volumes, JLR is aiming to reduce its debt to £2 billion from £3 billion during FY24, with a target of becoming net debt free in FY25. Not just this, JLR is also the dominant industry player in the electric passenger vehicle space in its home market, UK, with a market share of over 80%. “Demonstrated capability in newer technologies in the commercial vehicle space and pricing discipline across industry to aid aspiration of double-digit margins ahead,” said analysts at ICICI Direct. <cmsannotation type="cmsannotation" annotationid="Margins expand in domestic businesses too" comment="subhead" text="Margins expand in domestic businesses too">Margins expand in domestic businesses too</cmsannotation> Tata Motors’ commercial and passenger vehicle segments witnessed margin expansion in the March quarter – while the commercial vehicle segment delivered a 420 basis point margin expansion YoY to 10.1%, the passenger vehicle segment reported a 40 basis point increase to 7.3% in this period. Going forward, the company expects to touch double-digit margins and a sustained free cash flow generation. “Tata Motors should witness a healthy recovery as supply-side issues ease (for JLR) and commodity headwinds stabilise (for the India business),” said the analysts at Motilal Oswal. <cmsannotation type="cmsannotation" annotationid="Analysts bullish" comment="subhead" text="Analysts bullish">Analysts bullish</cmsannotation> Analysts are broadly bullish about Tata Motors’ growth prospects in FY24, thanks to lower input costs and JLR’s focus on capacity expansion as well as investments in the electric vehicle (EV) space. “Firmer commitment towards EV by JLR with an accelerated investment plan of £15 billion spend over the next five years will be one of the key triggers for future price performance,” ICICI Direct said. The brokerage added that it expects the company’s revenue to grow at a 20.1% compounded annual growth rate over FY23-25. “It will benefit from the commercial vehicle upcycle and stable growth in passenger vehicles, company-specific volume/margin drivers, and a sharp improvement in free cash flow as well as reduction in net debt in both JLR and the India businesses,” the Motilal Oswal report said, explaining its bullish outlook. Overall, brokerages affirmed their bullish outlook, raising their target prices to an average of ₹623, which is an upside of 17% from the current share price of ₹531. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/finance/news/fii-inflows-may-remain-consistent-in-may-with-turn-in-rate-cycle/articleshow/100234813.cms">FII inflows may remain consistent in May with turn in rate cycle</a> <a href="https://www.businessinsider.in/tech/news/heres-how-googles-new-ai-updates-will-transform-your-search-experience/articleshow/100242791.cms">Here’s how Google’s new AI updates will transform your search experience</a> <a href="https://www.businessinsider.in/tech/mobile/news/how-to-track-and-block-your-lost-smartphones-using-the-sanchar-saathi-portal/articleshow/100242116.cms">How to track and block your lost smartphones using the Sanchar Saathi portal</a>

Tata Motors in top gear, JLR to drive growth in FY24

April Auto Sales: Maruti Suzuki flags decline in bookings in April, electric two-wheelers lose momentum due to FAME-II irregularities

<ul><li><keyword id="42747" type="General" weightage="20" keywordseo="tata-motors" source="Orion">Tata Motors</keyword> has reported that its luxury car brand, Jaguar Land Rover, continues to be hurt by the ongoing semiconductor shortage. </li><li>Although the situation has eased a little, JLR’s retail sales continue to be hammered by the shortage, with sales falling nearly 40% in the December quarter. </li><li>Despite this, analysts remain divided on Tata Motors’ prospects, with the outlook spread across a spectrum of neutral, sell and buy. </li><li>Check out our <a href="https://www.businessinsider.in/bi-newsletter">weekly explainers</a> on the hottest topics and <a href="https://www.businessinsider.in/newsletters_signup.cms">sign up</a> if you like them. </li></ul>The semiconductor shortage is still chipping away at the sales of Tata Motors-owned luxury car maker Jaguar Land Rover. Tata Motors reported a nearly 40% decline in JLR sales in three months ending December 2021, compared to a year ago. And, that was more cars than what it sold three months earlier. <div type="image" title="Tata Motors 01_10_21 to 12_01_22." msid="88868002" hostid="261" caption="&amp;lt;p&amp;gt;Tata Motors share price since October, 2021&amp;lt;/p&amp;gt;"></div> According to an exchange filing, JLR sales stood at 80,126 units in the December quarter, down 37.6% when compared to the same period a year ago. The company is still confident that this too shall pass. “Underlying demand for JLR products remains strong and the company has proactively managed semiconductor supplies to maximise production of higher margin products,” Tata Motors said in an exchange filing. On a sequential basis, JLR is facing headwinds in both China and Europe, with sales down 6.9% and 6.8%, respectively. However, wholesale sales are chinning up with an increase of 8% in the same period. Essentially, dealers are stocking up more cars than those actually sold, hoping for more buyers to return sooner than later. <cmsannotation type="cmsannotation" annotationid="What are the analysts saying?" comment="subhead" text="What are the analysts saying?">What are the analysts saying?</cmsannotation> Despite JLR continuing to be a drag on Tata Motors’ overall performance, analysts are not completely negative on the company’s outlook. Bank of America gave the stock a neutral rating while observing that JLR’s volumes continue to disappoint, but the positive sales mix helped the company report a positive cash flow (£150 million). The easing of semiconductor shortage is visible in JLR’s output too. Production increased to 72,184 units, up 41% in the last three months. Its orderbook stood at 1,54,000 units, and the company’s cash flow was positive at £150 million (approx. ₹1,520 crore). CLSA, while stating that cash flow and profitability are expected to improve due to an increase in volumes, it maintained that the retail performance was ‘significantly’ lower. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Recommendation </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Target price </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Bank of America </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Neutral </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;"> ₹525 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">CLSA </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Sell </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;"> ₹408 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Emkay </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;"> ₹550 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Sharekhan </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;"> ₹610 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">ICICI Direct </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;"> ₹530 </td></tr></tbody></table> Source: Media reports SEE ALSO: <a href="https://www.businessinsider.in/tech/enterprise/news/tcs-vs-infosys-vs-wipro-how-indias-three-it-giants-stack-up-against-each-other/slidelist/88860676.cms">TCS vs Infosys vs Wipro Q3 results – here’s how India’s three IT giants stack up against each other</a> <a href="https://www.businessinsider.in/tech/enterprise/news/tcs-will-buy-back-shares-worth-18000-crore-for-a-price-up-to-4500-apiece/articleshow/88859747.cms">TCS will buy back shares worth ₹18,000 crore for a price up to ₹4,500 apiece</a> <a href="https://www.businessinsider.in/tech/enterprise/news/infosys-saw-its-revenue-grow-by-7-in-q3-fy22/articleshow/88855661.cms">Infosys raises full year guidance after the best quarter in at least eight</a>

JLR sales are still down but analysts say Tata Motors is healing

<ul><li>The future looks bright for India’s two-wheeler makers, who are now expected to outpace their peers in the passenger vehicles segment over the next two years.</li><li>The two-wheeler segment is expected to benefit from an imminent replacement cycle as well as a shift in consumer buying towards electric vehicles, and premium scooter and bikes.</li><li>Overall, the outlook for the Indian auto sector across segments is positive, with Jefferies expecting a volume growth in the range of 11% to 18% in FY24 and FY25.</li></ul>The future looks brighter for India’s two wheeler makers who have seen a volume decline of nearly 35% between FY19-22. Going forward however, global brokerage Jefferies expects the two-wheeler segment to outpace the passenger vehicle segment sales growth over FY24-25. The replacement cycle, which was delayed by the pandemic, will kick in the current and next fiscal years, believe analysts at Jefferies. Overall, its outlook for the Indian auto sector across segments is positive, with Jefferies expecting a volume growth in the range of 11% to 18% in FY24 and FY25. “We remain positive on Indian autos with the sector in midst of a strong earnings cycle. Strong top-line growth and better margins should fuel double-digit earnings per share compounded annual growth rate (CAGR) for most companies,” said Jefferies. Despite a challenging global environment in FY23, Indian auto companies made the most of the first disruption-free year after the Covid-19 pandemic. Domestic sales rose 21% year-on-year in the 11 months of FY23 when compared to the same period in FY22. Industry body <keyword id="610395" type="General" weightage="50" keywordseo="federation-of-automobile-dealers-association" source="Orion">Federation of Automobile Dealers Association</keyword> (<keyword id="354719" type="General" weightage="50" keywordseo="fada" source="Orion">FADA</keyword>) <a href="https://www.businessinsider.in/finance/news/after-21-growth-in-fy23-auto-sales-to-hit-slow-lane-in-fy24-fada/articleshow/99235136.cms">underlined</a> that FY24 will be a year of consolidation, with growth expected to be in the low single digits due to price hikes and inflation impacting entry-level sales, among other factors. <cmsannotation type="cmsannotation" annotationid="Two-wheelers to undergo premiumisation" comment="subhead" text="Two-wheelers to undergo premiumisation">Two-wheelers to undergo premiumisation</cmsannotation> Heading into FY24, the analysts at Jefferies note that factors like a low base and replacement demand will aid volume growth in the two-wheeler segment. It’s not just the volumes which are expected to pick up – other factors like shifting consumer preferences towards more premium vehicles and softening commodity prices are expected to aid the margins of auto companies going forward. “We expect 1% to 4% earnings before interest, taxes, depreciation and amortisation (EBITDA) margin expansion for most of our covered auto OEMs over FY23-25E, led by better pricing power amid good demand, and operating leverage benefit,” said Jefferies. While passenger vehicles witnessed premiumisation in FY23 as well, as witnessed by the sustained growth in demand for the costlier sports utility vehicles (SUV) over entry-level options, analysts suggest a similar trend of premium two-wheelers is also emerging. According to Jefferies, while sub-125cc two-wheelers share will drop from 52% in FY22 to 45% by FY26, the share of premium scooters and bikes is expected to rise from 44% to 53% in this period, with electric vehicles also aiding this shift. <cmsannotation type="cmsannotation" annotationid="TVS Motor, Tata Motors top picks as EVs gather pace" comment="subhead" text="TVS Motor, Tata Motors top picks as EVs gather pace"><keyword id="46156" type="General" weightage="100" keywordseo="tvs-motor" source="Orion">TVS Motor</keyword>, <keyword id="42747" type="General" weightage="80" keywordseo="tata-motors" source="Orion">Tata Motors</keyword> top picks as EVs gather pace</cmsannotation> While the outlook for the Indian auto sector remains healthy over the next two years, the analysts at Jefferies have picked <keyword id="62356" type="General" weightage="50" keywordseo="tvs" source="Orion">TVS</keyword> Motor and <keyword id="8555" type="General" weightage="80" keywordseo="tata" source="Orion">Tata</keyword> Motors as their favourites, apart from auto components manufacturer Sona BLW. The common factor between these three companies is that they cater to the electric vehicle demand. In the listed space, TVS Motor leads the market in terms of electric two-wheelers, while <a href="https://www.businessinsider.in/business/news/tata-motors-rallies-nearly-8-on-strong-jlr-sales-in-march-quarter-analysts-bullish-with-an-eye-on-margins/articleshow/99372607.cms">Tata Motors</a> has a market share of 80% in electric passenger vehicles. “TVS should be a key beneficiary of the potential two-wheeler demand recovery in both India and export markets. It has also risen to the second position in electric two-wheelers with its EV market share approaching that of internal combustion engine (ICE) scooters,” the brokerage said. Tata’s early shift to electric vehicles reflects its dominance in this space (electric passenger vehicles), and also in its own portfolio – electric vehicles now account for nearly 15% of Tata Motors’ portfolio. Its British subsidiary, JLR, also has a strong order book and its focus on selling higher-margin SUVs should help boost Tata Motors’ overall margins, too. On the whole, despite concerns of a global economic slowdown, Indian auto companies are looking at a healthy growth over the next two years thanks to robust domestic demand, and an expected recovery in global markets. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/retail-investors-increase-stakes-in-all-adani-stocks-after-hindenburg-report/articleshow/99429000.cms">Retail investors ‘buy the dip’ in all ten Adani group stocks</a> <a href="https://www.businessinsider.in/finance/news/strong-q4-on-the-cards-but-concerns-emerge-on-fall-in-casa-deposits-and-credit-offtake-slowdown/articleshow/99396102.cms">Strong Q4 on the cards, but concerns emerge on fall in CASA deposits and credit offtake slowdown</a> <a href="https://www.businessinsider.in/stock-market/news/fpis-offload-it-oil-gas-stocks-worth-13734-crore-in-march/articleshow/99375107.cms">FPIs offload IT, oil &amp; gas stocks worth ₹13,734 crore in March; remain net sellers of Indian stocks for 2 years running</a>

After languishing since FY19, two-wheeler growth to outpace passenger vehicles in FY24-25

<keyword id="42747" type="General" weightage="100" keywordseo="tata-motors" source="Orion">Tata Motors</keyword> completed onboarding 500,000 vehicles onto the connected vehicle platform (<keyword id="213713" type="General" weightage="80" keywordseo="cvp" source="Orion">CVP</keyword>) that caters to its entire range of commercial, passenger and electric vehicles, <keyword id="80005" type="General" weightage="80" keywordseo="tata-elxsi" source="Orion">Tata Elxsi</keyword> said on Wednesday. In early 2019, Tata Motors collaborated with Tata Elxsi to adopt and adapt the <keyword id="2762594" type="General" weightage="80" keywordseo="tether" source="Orion">Tether</keyword> connected vehicle platform (CVP) towards a common standard technology stack to deliver scalability, differentiated features, high performance and expandable to Industry 4.0 to transform their internal operations, according to a statement from Tata Elxsi shared with exchanges. This would help original equipment manufacturers (OEMs) convert data and insights into enhanced customer experience, lower costs, and monetisation, the company said. Tether, Tata Elxsi's connected vehicle platform (CVP), is a cloud-based Internet of Things (IoT) data platform that enables automotive customers to offer a range of customer-centric and digitally-enhanced features. With customer-centric features, the CVP aims to improve the user's comfort, convenience, and safety, the company statement said. Automotive customers means companies in the territory that are original equipment manufacturers of passenger cars or light trucks. Tata Motors deployed the Tether CVP under the brands of Fleet Edge for commercial vehicles, iRA for passenger vehicles and Zconnect for electric vehicles, which offer features like track and trace, geo-fencing and alerts, driver behaviour monitoring, fuel-efficiency monitoring, Tata Elxsi said. In addition, they enable secure and selective access to the platform and relevant data with its wider partner ecosystem, including dealers, and suppliers, to enrich customer experience. Tether CVP was built as a modular platform, which can be scaled up to offer a wide range of solutions with third-party applications through application programming interfaces (APIs). In addition, it is a fifth-generation (5G)-ready platform with additional capabilities that would serve OEMs. Rajendra Petkar President and Chief Technology Officer, Tata Motors, said, "In line with Tata Motors stated objective of offering differentiated products based on our CESS philosophy (connected, electrified, safe and shared), we are delighted to have partnered with Tata Elxsi..." Tata Elxsi brings strong automotive electronics experience, coupled with an excellent understanding of cloud-based applications, data governance and the latest user experience capabilities. <keyword id="8789462" type="General" weightage="50" keywordseo="manoj-raghavan" source="Orion">Manoj Raghavan</keyword>, Managing Director and Chief Executive Officer, Tata Elxsi, said, "We congratulate Tata Motors and are proud to be a strategic partner to help them in achieving their vision for the future of mobility that is connected, electric, safe and shared." SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/flipkart-fined-by-bengaluru-consumer-court-for-not-delivering-cellphone/articleshow/96728111.cms">Flipkart fined for not delivering cellphone after receiving payment in advance</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/torrent-stalls-reliance-capital-resolution-process-with-an-interim-stay/articleshow/96727967.cms">Torrent stalls Reliance Capital resolution process with an interim stay</a>

You Searched For "tata motors future" and got 8 results

Tackling the 'Korean Discount': A deep dive into curious case of Hyundai Motor India's market listing

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Tata Motors cuts EV prices by up to ₹1.2 lakh as battery cost dips

PTI

Rishi Sunak hails Tata Group's multi-billion EV investment in UK

PTI

Tata Motors in top gear, JLR to drive growth in FY24

Rounak Jain

April Auto Sales: Maruti Suzuki flags decline in bookings in April, electric two-wheelers lose momentum due to FAME-II irregularities

Rounak Jain

JLR sales are still down but analysts say Tata Motors is healing

Rounak Jain

After languishing since FY19, two-wheeler growth to outpace passenger vehicles in FY24-25

Rounak Jain

Tata Motors brings 500,000 vehicles onboard its data platform Tether

ANI

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