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  • 08 Jun 2023
  • ICICI Securities

Tata Motors conducts annual investor day of Indian operations

TATAMOTORS - 1039 Change: -10.65 (-1.01 %)

News: The company yesterday conducted its investor day with respect to Indian operations wherein it reiterated its commitment towards winning sustainably in the domestic PV business and proactively in the EV-PV business by way of industry leading volume growth amid new model launches and refreshes with the target to attain double digit EBITDA margins (~7% in Q4FY23). On the CV front, the focus was on further building up on its leading market share and winning decisively with focus on product launches in alternate fuel domain as well as attaining higher double digit margins (~10% in Q4FY23) in this domain amid lower discounting in the marketplace and focus on retail market share. On the financials front, key targets were left unchanged with the company aiming to be net auto debt free by FY25 and capex for Indian operations pegged at ~Rs 8,000 crore for FY24E with capex/investment in the EV business pegged at US$2 billion by FY27 (majority on product and platform).

Views: Further, the company also shared probable synergies and backward integration benefits with Tata Sons entity “Agratas”, which is putting up an EV cell manufacturing facility in India (in about two years with initial capacity of 20 GwH). Further, the company informed about Ford's Sanand plant to ramp up from H2FY24 and producing both ICE & EV. We came away impressed by the background work that the company underlined behind its success in the PV space amid new forever series of products, its focus on design, safety and technology and ethos over sustainability. With debt on a substantial downward trajectory and consequently interest outgo, it outlined its intention to commensurately increase dividends, going forward (positive for Tata Motors DVR shareholders).

Impact: Positive