Tata Motors Announces Demerger Into 2 Separate Companies

Value unlocking expected from the Demerger

In a strategic move, Tata Motors has decided to demerge its business into two separate listed companies. This decision, approved by the board of directors, aims to empower individual business units and unlock further growth potential.

One entity will house the commercial vehicle (CV) business and its related investments, while the other will encompass the passenger vehicle (PV) business, including electric vehicles (EV) and Jaguar Land Rover (JLR), along with their respective investments.

This demerger follows the successful implementation of distinct strategies across CV, PV+EV, and JLR segments over the past few years. Each business unit has operated independently under its own CEO since 2021. By separating these entities, Tata Motors aims to further empower them to pursue independent strategies and achieve higher growth with greater agility and accountability.

The demerger is expected to unlock significant collaboration opportunities between PV, EV, and JLR, particularly in areas like electric vehicles, autonomous driving, and vehicle software development. This strategic move positions Tata Motors’ diverse business units for future success in their respective markets.

Financial Performance

In Q3FY24, the company posted a 25.08% increase in its consolidated revenue at Rs 1,09,799.22 crore compared to Rs 87,783.21 crore from the previous year’s corresponding quarter. The operating profit of the company stood at Rs 16,917.17 crore, while the PAT of the company stood at Rs 6952.17 crore, from Rs 2939.78 crore last year in the same quarter.

Business Overview

Tata Motors is India’s largest automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, South Africa, and Indonesia. Among them is Jaguar Land Rover, the business comprising the two iconic British brands.

Stock Price Movement 

Today, the stock of tata motors opened at Rs 992.95, with a high and low of Rs 995.75 and Rs 980, respectively. The stock is closed trading at Rs 987.20, which decreased by 0.12%. The stock has a 52-week high of Rs 995.75 and a 52-week low of Rs 400.40.

The stock has shown impressive growth, and investors should keep a close eye on this stock.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.