TATAMOTORS INTRODUCTION & SHARE VALUATION PART 1 $TATAMOTORS
Hi guys!
You have been waiting for a long time - and now it's here: The TATAMOTORS introduction & share evaluation! As I have seen from your comments, you seem to have been very interested in my exotic contribution to India and the influences of poverty and wealth on the school system and thus the professional perspective. Therefore, I will bring this series back to life and now introduce Tata Motors.
DISCLAIMER: This is not investment advice. It is also not a solicitation to buy and / or sell financial products. I am merely describing my opinion here. You have your own responsibility towards your investments. So I also assume no liability.
Now let's start with the introduction of Tata Motors. In order to start from the same page, I suggest the following structure:
1.Tata Motors - an Indian TESLA?
- Introduction of the company
2.share valuation
- Graham Extrapolation & Multiple Valuation
- DCF Analysis
3.relation to BYD & TESLA
So that it does not get too much today, we start in part 1 with the introduction of the company.
Part 1: Introduction of the company
Tata Motors is no stranger to India - established in India in 1945, Tata Motors now employs 73,608 people and has over 9,300 sales and service outlets worldwide. Added to this is its reputation as India's largest automobile manufacturer, which plans to embark on a massive expansion course in 2024. The "Sustainability" area in particular is seen as a target for this, as Tata Motors has committed itself to the electrification of automotive transport. Especially with the focus on 125 countries worldwide, it is not impossible that we will hear more often from this huge Indian player in the automotive industry in the future (see (1), (2)).
The automotive portfolio essentially consists of the 3 main categories of commercial vehicles (mostly pickups, trucks and the like), passenger vehicles (abbreviated via TVs in the documents) and the luxury division of the Tata Motors Group (cf. ibid.).
Any Indian naming coming now?
Yes - typical Indian brand names like "Jaguar Land Rover". This group emerged from 2 takeovers, so that first Land Rover Ltd. was taken over by Jaguar Cars Ltd. and then this conglomerate was bought by the Tata Group. Thus the culturally overlapping factor, which usually builds up a certain cultural distance especially with us rather geographically distant cultures, should be known. Tata Motors is backed by its affiliation with the Tata network, which in itself generated total sales of $128 billion in 2022. Compared to BMW, that's virtually in the middle of 2021 sales (€111.2 billion) and below 2022 sales ($142.6 billion). The Ingolstadt-based companies around Audi can't even look back at half of the Tata network - their global and Group-wide sales are €61.75 billion (see (2), (3), (4), (5)).
And Tata Motors itself?
34,7.
Yes, you read that right. The giant Tata Group achieves "only" 34.7 billion euros in sales with its automotive division, which translates to total sales:
€34.7 billion / 115.34 = 30.08%.
represents. The 34.7 billion USD may not stand out in relative terms compared to German automakers. BUT: Imagine: BMW would have an e-market share of 90% (cf. (2), (7)).
Why would I imagine that?
Because it is fact for Tata Motors. 90% market share of E-cars approximately has this group in India - one of the strongest emerging markets at all. India has also been largely resistant to the challenges arising from EM motor China, so Tata Motors has more or less a home field advantage here. For example, the Tata Indica (a small 5-door car in the style of an Opel Corsa) was built entirely on site in India. The American dream of own production and own consumption without foreign countries having to interfere. In my eyes, this is a factor that should not be underestimated, especially when it comes to the problem of many industrialized countries to produce locally but cheaply at the same time (see (9), (13)). Many of my subscribers will certainly remember at this point my remarks on the subject of school, salary and education in India. This kind of practical and at the same time IT-focused education enables synergy effects in what is currently the strongest emerging market in my opinion. To put it crudely, one might think that while we teach the umpteenth non-practical subject to our children, many Indian graduates can look back on a broad skill set in the form of multiple programming languages and business topics. However, this does not come without a price. For those just interested, I recommend my first post on India as an Emerging Market. Otherwise, this would go too far.
If we add the absolute market share, Tata Motors' is just under 14% in India, making it top 3 - group with a clear focus on e-mobility. A total of 3 million new vehicles enter the Indian market each year, which are fully electric and currently account for only 1% of new registrations.
Yes then e-mobility is irrelevant in India? The market leadership in India there then too?
No - because India's perspective on e-mobility is absolute. That means that in the next 7 years until the beginning of 2030, e-mobility should form a second standard and be at 30 percent (see (13)).
The situation in India is also fundamentally different from ours. If we look at India's main car brands with market share in India, we find (cf. (10), (11)):
- Maruti Suzuki India with 41.6%.
- Hyundai India with 14.6
- Tata Motors (unsurprisingly) with 13.9
- Mahindra & Mahindra with 8.8
- Kia India with 6.7%
In addition, Eicher Motors and Bajaj Auto are also mentioned in this context. What stands out?
If we play out the future of Tata Motors in e-mobility, parallel market leadership in this segment would mean that it has a quasi-autonomous 90% share of 30% of the market. This is not a monopoly position in the direct sense, since the market is not majority-owned and the main competitors are also active via other technologies - nevertheless, the progressive electrification of Indian car traffic is a unique feature that I have not seen in any company to date in such strength (see (12), (13)).
India is more or less living up to my forecast from 2010, where I was still an enthusiastic fan of e-mobility and saw a gradual decline in internal combustion engines (ins. For gasoline engines) as sensible.
And what does the market situation look like in Germany? For BMW, for example?
Based on the registration figures from March of this year, BMW's market share is just over one-tenth of that: Only 7.6% is accounted for by new registrations in the period under consideration. Mercedes, Porsche and Volkswagen all have triple-digit growth in registrations - though Mercedes, with a 38.1% increase to 10% market share, and the VW Group, with 29.5% growth and 17,.7% market share, achieve the highest figures among German manufacturers. No one can look back on such a high market share as in India (see (7), (8)).
So while we want to keep the combustion engine competitive in the long term via e-fuels, India as an emerging market is competing for e-market leadership via Tata Motors with clear e-ambitions. I am curious to see who and what will prevail: German energy mix or sole e-mobility?
This concludes the first part of this analysis. In the following part, I would answer questions like:
- Why does Tata Motors want to sell its E division if that is where the group strategy lies?
- What are the sample cars and how do the cheap India E cars perform vs TSLA and co?
- How does Tata Motors stock perform in my stock analysis?
Did you like the article? Would you want to read a sequel? Feel free to drop me a line in the comments.
Who is interested in the Exxon Mobil share as a typical supplier of internal combustion engines via gasoline, diesel & Co. will certainly find my stock analysis on YouTube exciting! Every subscriber or Like whether Getquin or YouTube helps me :)
https://youtu.be/hE9BTcIR1O4
Thanks for the support in the form of over 1,000 subscribers on Getquin and over 500 followers on YouTube! Never thought my posts would be so well received.
Your Bass-T
#indien
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Sources
(1) https://www.tatamotors.com/
(2) https://www.tatamotors.com/wp-content/uploads/2022/09/tata-motors-group-corporate-presentation-2022.pdf
(3) https://de.statista.com/statistik/daten/studie/30727/umfrage/umsatz-der-bmw-group/
(4) https://de.statista.com/statistik/daten/studie/36002/umfrage/umsatzerloese-des-automobilherstellers-audi/
(5) https://www.tatamotors.com/press/tata-motors-completes-acquisition-of-jaguar-land-rover/
(6) https://www.dasinvestment.com/china-indien-mexiko-schwellenlaender-emerging-markets/
(7) https://www.autozeitung.de/zulassungsstatistik-140455.html
(8) https://de.statista.com/statistik/daten/studie/235380/umfrage/monatliche-marktanteile-der-automarken-in-deutschland/
(9) https://www.golem.de/news/tata-tiago-ev-indischer-autohersteller-stellt-10-000-euro-elektroauto-vor-2209-168620.html
(10) https://logosmarken.com/indische-automarken/
(11) https://simplywall.st/stocks/in/automobiles/bse-500570/tata-motors-shares/valuation
(12) https://www.manager-magazin.de/lifestyle/auto/a-793991.html
(13) https://www.elektroauto-news.net/news/tata-vervierfacht-e-auto-produktion-zeigt-neue-konzepte
(14) https://www.auto-motor-und-sport.de/verkehr/automarkt-indien-neuzulassungen/
