Tata Motors has announced a price increase of up to 3 percent on its commercial vehicles, effective from October 1, 2023. This adjustment is aimed at counteracting the residual impact of past input costs, according to India’s largest commercial vehicle manufacturer.
The price hike will vary depending on the model and variant, and it will be implemented across the entire range of commercial vehicles.
Furthermore, Tata Motors revealed on March 4 its decision to demerge its businesses into two separate listed entities: commercial vehicles (CV) and passenger vehicles (PV), which includes electric vehicles (EVs) and Jaguar Land Rover (JLR).
This strategic move by the company has garnered positive reactions from brokerages. Global brokerage firm Morgan Stanley assigned an ‘overweight’ call on Tata Motors on March 5, while Nomura issued a “buy” call with a target price of Rs 1,057, representing a 7 percent upside from the current market price. Nomura stated that in the medium term, the businesses should be able to pursue their respective strategies with greater freedom.
Additionally, rating agency Moody’s affirmed Tata Motors’ BA3 ratings on March 6, with the outlook remaining positive.
Analysts monitoring Tata Motors believe that the proposed demerger plan will enable the company to leverage the strengths of its different business segments.
In recent years, Tata Motors’ commercial vehicle, passenger vehicle (including electric vehicles), and luxury vehicle Jaguar Land Rover (JLR) businesses have been pursuing distinct growth strategies. Since 2021, these segments have operated independently under their respective CEOs, as stated by Tata Motors.
On January 21, Tata Motors announced a price increase averaging 0.7% across its entire range of passenger vehicles, which includes electric vehicles, effective from February 1, 2024.
During the trading session on March 7, at 2:32 am, Tata Motors’ stock was trading at Rs 1039.50 per share on the National Stock Exchange (NSE), marking a 2.15 percent increase (or Rs 21.85) compared to the previous day’s closing price.
On March 5, the stock reached a 52-week high of Rs 1,065.60.