In this article, we are going to talk about the plans of the management of Tata Motors in the coming period. FY23 and FY21 can be a very crucial year for Tata Motors specifically on the Indian Business of Passenger Vehicles where TPG has invested around $1 Billion or Rs. 7,500 Cr. in Electric Vehicle Segment. So, let’s move forward and discuss some plans for Tata Motors in this article.
Q3FY22 Highlights:
- In Q3FY22, Tata Motors has become the second-largest player in Utility Vehicles (UVs), by beating Hyundai.
- Tata Motors now holds a market share of 18% raking next to the market leader- Maruti Suzuki in the Utility Vehicles segment.
- The UVs business is growing at a rapid pace in the passenger vehicle segment compared to other vehicles like sedans, etc.
- In the overall Passenger Vehicles category, Tata Motors owns a market share of 13% and has become the third-largest company after Maruti Suzuki and Hyundai.
- In 9MFY22, the revenue of the company from Passenger Vehicles is Rs. 22,000 Cr. and the same was Rs. 8,600 Cr. in Q3FY22 itself. Here, the company targets to generate revenue between Rs. 12,000 Cr. to Rs. 13,000 Cr. per quarter.
- Tata Motors has also recorded the highest ever SUV sales of 28,108 units in Q3FY22. The company also sold 2,892 units of EVs in the total SUV sales which accounts for around 10%.
- The company was a late entrant in the CNG vehicle launch, but within a few weeks of launching, the company sold 3,000 units on the grounds of a strong distribution network.
Medium to Long Term Plans of Tata Motors:
- In the next three to five years, the company wants to sell 20% CNG vehicles, 20% EVs, and around 50% petrol vehicles, and the rest 10% diesel vehicles out of every 100 vehicles to be sold.
- Currently, the company is selling around 94%-95% of petrol vehicles.
- Further, the company wants to focus on stepping up CNG vehicles sales by utilizing the strong distribution network of natural gas companies.
- In FY22, the company aims to sell 3.7 Lakh units which looks like an easy target for the company on cards. If this happens so, it will be an increase of 65% YoY in terms of units sold.
Targets of the Company for FY23:
- For FY23, the company aims to sell 5,00,000 units.
- Further, the company has asked its component suppliers to be ready for 6,00,000 units.
- Moreover, the company wants to sell 50,000 units per month to achieve the target of selling around 6,00,000 units in FY23.
- If the desired product is achieved, the company could earn revenue of around Rs. 50,000 Cr. to Rs. 60,000 Cr. which will be the rise of around 80% to 95% of the revenue of FY21 (annualized).
What Should Investors Do?
The ambitious target of Tata Motors is quite encouraging. The company seems to be ready for achieving this target. Also, Indian Business is on a right track to becoming a net-debt free which is another positive sign. With normalization in the semi-conductor supply, things can work positively for the company as well. Further, the company’s efforts on segments like EVs, CNGs, and strengthening of distribution network can also help the company in gaining market share. Hence with such developing prospects in the automobile industry, Tata Motors is one of the stocks which should be on the Investor’s radar.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circ*mstances does this information represent are commendation to buy or sell stocks or MF.
