Business

Tata Motors share price after demerger: Which entity may create more value?

Nomura India stated that the division of Tata Motors Ltd (TTMT) into commercial vehicle (CV) and passenger vehicle (PV) segments is unlikely to prompt an immediate change in how investors assess its value. The firm highlighted the well-managed operations and transparency of India CVs, JLR, and PVs as factors contributing to this stability.

Looking ahead, Nomura anticipates that the individual businesses will gain more autonomy to pursue their strategies in the medium term. It particularly emphasizes the potential of Tata Motors’ PV segment to generate value in the coming years, citing its significant improvement in market share post-2020 due to a focus on safety, appealing design, and feature-rich vehicles.

Nomura India suggested that Tata Motors aims to become the second-largest PV player in India by FY25-26F, while mentioning Hyundai Motor India’s exploration of an IPO in India with a valuation range of $22-28 billion. Despite acknowledging Hyundai’s higher margins, Nomura India maintains its target price for Tata Motors at Rs 1,057, unchanged for now.

Manish Raj Malik

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