Tata Motors, the Indian car giant, is getting ready for a possible split between its passenger vehicle and commercial vehicle businesses in 2025. This strategic move is meant to increase value for shareholders by letting each division work on its own and focus on the unique dynamics of its market and growth possibilities.
The demerger has been talked about for a while and could have a big effect on the company’s future. It could make both groups more flexible, give them more focus, and make them more competitive.
Tata Motors Demerger Date
Tata Motors has not yet announced a specific date for the demerger of its passenger vehicle and commercial vehicle businesses. The company has said, though, that it thinks the demerger will be finished within the next 12 months. This means that the possible end date would be sometime in 2025.
Tata Motors Demerger Ratio
The Tata Motors demerger ratio is 1:1. For every share of Tata Motors a shareholder owns, they will receive one share in the new company housing Tata Motors’ passenger vehicle business and one share in Tata Motors’ commercial vehicle business.
The 1:1 ratio ensures that shareholders maintain the same proportion of ownership in both entities even after the separation.
Tata Motors Share Price
As of December 16, 2024, Tata Motors shares were trading at ₹784.70, down by 0.75% from the previous closing price of ₹790.60.
Tata Motors Share Price Target
The demerger announcement has prompted several brokerage firms to issue target prices for Tata Motors shares. The targets are based on the assessments and methodologies used by individual analysts.
- Emkay Global: From Rs 925, the SOTP-based target was raised to Rs 950.
- Nomura India: Keeping the price target at Rs 1,057 unchanged.
- UBS: “Sell” rating with Rs 600 target price.
- Nuvama Institutional Equities: The target price of Rs 1,000 has been maintained on Tata Motors shares, but the rating has been downgraded to “Neutral.”
The target pricing of other brokerages may differ from these examples. Make sure you consult a qualified financial advisor before making any investment decisions.
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Tata Motors Sales Data
Tata Motors has reported total sales of 2,15,034 units in Q2 FY25, indicating a decrease from the 2,43,024 units sold in Q2 FY24.
Domestic Sales Performance
In September 2024, Tata Motors achieved domestic sales of 69,694 units, which is a 15% decline from the 82,023 units sold in September 2023. Over Q2 FY25, the total domestic sales were 2,09,861 units, down by 11% from the 2,37,128 units sold in Q2 FY24.
Commercial Vehicles (CV)
The total sales of commercial vehicles in Q2 FY25 were 84,281 units, marking a 19% decline from the previous year’s 104,085 units. In September 2024 alone, sales were 30,032 units, a 23% drop from September 2023’s 39,064 units.
- HCV Trucks: Sold 9,295 units in September 2024, down 28% from 12,867 units in September 2023. For Q2 FY25, sales were 22,904 units, a 25% decline from 30,369 units in Q2 FY24.
- ILMCV Trucks: Sold 5,387 units in September 2024, a 16% drop from 6,377 units in September 2023. In Q2 FY25, sales were 14,693 units, an 11% decrease from 16,483 units in Q2 FY24.
- Passenger Carriers: Sold 3,101 units in September 2024, down 7% from 3,344 units in September 2023. For Q2 FY25, sales increased by 3% to 10,935 units from 10,622 units in Q2 FY24.
SCV Cargo and Pickup: Sold 10,848 units in September 2024, a 26% decline from 14,626 units in September 2023. In Q2 FY25, sales were 31,399 units, down 25% from 41,704 units in Q2 FY24.
Passenger Vehicles (PV)
The total sales of passenger vehicles, including EVs, in Q2 FY25 were 1,30,753 units, a 6% decrease from 1,38,939 units in Q2 FY24. September 2024 saw sales of 41,313 units, down 9% from September 2023’s 45,317 units.
- EV Sales: Combined domestic and international EV sales were 15,642 units in Q2 FY25, down 16% from 18,615 units in Q2 FY24. In September 2024, EV sales were 4,680 units, a 23% drop from 6,050 units in September 2023.
Overall, Tata Motors faced a decline in sales across various segments in Q2 FY25, but it is expected to improve in the coming quarter due to strategic initiatives and festive season demand.
You can find detailed information in the official press release and financial statements of Tata Motors.
