This Automaker Charts Ambitious Growth Path, has a 13% Upside

[Pelican Press 0]

This Automaker Charts Ambitious Growth Path, has a 13% Upside

At its recent India Investor Day, ***** Motors (NS:) ***** out an ambitious roadmap focused on strengthening its franchise and improving profitability across both passenger vehicles (PVs) and commercial vehicles (CVs). Jefferies analysts highlight *****’s strategic goals and growth projections, emphasizing the company’s potential to significantly enhance its market position and financial performance in the coming years.

***** Motors aims to boost its market share in the PV segment from 14% in FY24 to 16% by FY27, and further to 18-20% by FY30. This growth trajectory is underpinned by a series of new product launches, including the mid-sized SUV Curvv and the Harrier electric SUV in FY25, followed by the Sierra and Avinya EVs in FY26. These introductions are expected to increase *****’s addressable market from 53% of total industry volumes to 80%.

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InvestingPro’s revolutionary fair value feature is depicting a healthy upside potential of 13.5% to INR 1,121. This valuation has been derived after taking 14 different financial models into consideration, making the final value more realistic.

Jefferies maintains a “Buy” rating for ***** Motors, with a price target of INR 1,250, reflecting a 28% upside. This

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is supported by robust growth projections across *****’s segments:

• Jaguar Land Rover (JLR): Volume growth of 9% and 6% in FY25 and FY26, respectively, with an EBITDA margin of 16.0-16.3%.

• India CVs: Volume growth of 9% and 8% in FY25 and FY26, respectively, maintaining an EBITDA margin of approximately 11%.

• India PVs: Volume growth of 11% and 18% in FY25 and FY26, respectively, with an EBITDA margin improving to 7.6-8.3%.

Jefferies also forecasts a 13% CAGR in EBITDA and a 23% CAGR in EPS over FY24-26, with ***** Motors’ auto balance sheet expected to show $4.6 billion in net cash by FY26.

Moreover, ***** is focused on enhancing profitability in the PV segment. The company aims to improve its EBITDA margin in internal combustion engine (ICE (NYSE:)) PVs by over 2 percentage points in the coming years, building on the current margin of 9.4% in FY24. ***** also targets a breakeven in its EV segment by FY26, a significant turnaround from the -7.1% EBITDA margin reported in FY24.

In the CV segment, ***** Motors is looking to capitalize on a projected 4-5% compound annual growth rate (CAGR) in industry volumes over the next five years, driven by sustained economic growth and a strong governmental push on infrastructure development. To reduce business volatility, ***** plans to increase the share of non-vehicle revenues from the low-to-mid teens in FY24 to 20% in the medium term. The company also aims to maintain a strong double-digit EBITDA margin, projected at around 11% for FY25-26.

*****’s strategy for CVs includes enhancing its product portfolio, investing in alternate fuel technologies, and leveraging digital business solutions. These initiatives are expected to position ***** strongly in the CV market, ensuring sustainable and profitable growth.

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#Automaker #Charts #Ambitious #Growth #Path #Upside

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