Tata Motors is now among the top 10 most valuable global auto companies

Tata Motors Ltd., the first Indian business to do so, has broken into the top 10 most valuable global automotive companies, owing to its ongoing stock boom. The stock has increased by more than 50% this year and more than 101% in 2023, and it currently has the largest market capitalization of any Indian automaker at $51 billion.

With a market valuation of $711.19 billion, Tesla Inc. is the largest company in the world. Toyota Motors is second with $307.50 billion, and BYD Company is third with $92.65 billion. After Mercedes-Benz Group ($71.26 billion), Porsche ($68.29 billion), BMW AG ($59.54 billion), Volkswagen AG ($58.18 billion), and Honda Motor Co. ($56.12 billion), Ferrari NV comes in fourth place with a market capitalization of $74.02 billion.

The stock of Tata Motors has tripled in the last three years due to the company's high hopes for its passenger cars. With Jaguar Land Rover (JLR) on a profitable development path, the corporation has made remarkable strides toward turnaround. Tata Motors is the market leader in electric automobiles in India and has expanded into utility vehicles. Strong sales are necessary for the company's EV business to continue investing in, as it has yet to break even at the EBITDA level.

Analysts point out that Tata intends to introduce new EV models and targets a 50% EV volume by 2030, which might result in a large gain in value. JLR will continue to produce a sizable amount of sales and profits despite the challenges in the passenger car industry, especially as it faces competition as it makes the switch to electric vehicles.

Analysts also said that JLR's supply of semiconductor chips has improved, which has eased the company's issues and allowed it to service a larger client base by lowering its order backlog. Strong demand and a growing order book are still there, and new models should increase volumes even further.

Nomura said in a recent note that it anticipates robust demand to sustain EBITDA margins at about 11.5 percent and maintains a 5 percent volume CAGR for FY25â€"27F. It is feasible to raise the FY25F estimate from flat to negative growth, with e-buses perhaps contributing to further upside.

Tata Motors said recently that analysts support its strategy to demerge into two firms. The domestic EV segment and Jaguar Land Rover (JLR) will be part of Tata's PV business after the demerger, providing investment potential in both home and international premium markets. This approach, according to Sharekhan, might challenge Maruti Suzuki's supremacy by enabling investors to participate in mass-market PV growth.

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