Tata Motors , one of India's leading automobile manufacturers, has reported a significant surge in passenger vehicle sales during the festive period between Navratri and Diwali. The company delivered over 1 lakh passenger vehicles, marking an impressive 33% growth compared to the same period last year.

SUV Segment Drives Growth

The robust performance was primarily driven by strong demand in the SUV segment:

• Nexon: Over 38,000 retail sales, registering a remarkable 73% year-on-year growth
• Punch: 32,000 units sold, showing a 29% increase

Electric Vehicle Momentum

Tata Motors continues to make strides in the electric vehicle (EV) market:

• Over 10,000 EVs retailed during the festive period
• 37% growth in EV sales compared to the previous year

Management's Perspective

Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles Limited (formerly Tata Motors Limited), expressed confidence in maintaining this momentum for the rest of the fiscal year. He cited the company's favorable positioning in both traditional and electric vehicle markets as key factors for sustained growth.

Company Name Change

It's worth noting that Tata Motors Limited has recently changed its name to Tata Motors Passenger Vehicles Limited, as per the approval from the National Company Law Tribunal, Mumbai Bench. This change reflects the company's focus on the passenger vehicle segment, including its investments in electric vehicles and Jaguar Land Rover.

Market Implications

The strong sales performance during the festive season, coupled with the company's strategic focus on SUVs and electric vehicles, positions Tata Motors Passenger Vehicles Limited well in the competitive Indian automotive market. The growth in both traditional and electric vehicle segments suggests a balanced approach to meeting diverse consumer needs and evolving market trends.

As the automotive industry continues to transform, Tata Motors Passenger Vehicles Limited's performance indicates its adaptability and strong market presence in the passenger vehicle segment.

Tata Motors , one of India's leading automotive manufacturers, saw its shares rise by 2.4% to Rs 400.30 following the demerger of its passenger and commercial vehicle businesses. This corporate action marks a significant restructuring for the company, potentially unlocking value for shareholders.

Demerger Details

The demerger, which had a record date of October 14, involves the separation of Tata Motors' passenger and commercial vehicle operations. Shareholders received one share of Tata Motors Commercial Vehicles Ltd (TMLCV) for every share held in Tata Motors Passenger Vehicles Ltd (TMPV). This strategic move aims to create two distinct entities, each focused on its specific market segment.

Share Price Implications

The demerger has led to interesting price dynamics:

The implied value for the commercial vehicle arm (TMLCV) is Rs 260.75 per share, based on the difference between the pre-demerger price and TMPV's opening price.

Market Expectations

Brokerages view the demerger positively for value creation:

• ICICI Securities expects the CV business to trade at 11 times EV/EBITDA
• TMPV's fair value is estimated at Rs 450-500

TMLCV Highlights

TMLCV enters the market as India's largest commercial vehicle maker:

• Market share: 37.1%
• EBITDA margin: 12.2%

The company is pursuing a significant acquisition, aiming to purchase Iveco Group's commercial vehicle operations for €3.8 billion.

TMPV Overview

TMPV's business is heavily reliant on its Jaguar Land Rover subsidiary:

• 87% of revenue derived from Jaguar Land Rover
• Expected growth: 8-10%
• Growth drivers: New model launches and EV/CNG variants

Recent Corporate Action

According to the latest LODR data, TMLCV allotted 3,68,23,31,373 fully paid-equity shares of face value ₹2 each to Tata Motors' equity shareholders in a 1:1 ratio. This allotment marks the formal separation of the commercial vehicle business from Tata Motors.

The pre-Scheme paid-up share capital of TMLCV, consisting of 5,00,000 fully paid-up equity shares of ₹2 each held by Tata Motors, has been cancelled and reduced. As a result, TMLCV has ceased to be a wholly-owned subsidiary of Tata Motors.

TMLCV is expected to take necessary steps to obtain listing and trading permissions for these newly allotted shares on the BSE Limited and National Stock Exchange of India Limited in due course.

This demerger represents a significant milestone for Tata Motors, potentially allowing each entity to focus on its core competencies and create more targeted strategies for growth in their respective markets.