Tata Motors: 2023 Tata Nexon pricing attractive; stock target R…

Foreign brokerage Nomura India finds the pricing for Tata Motors' new Nexon (ICE) and EV variants attractive. It believes Nexon offers the best-in-class technology and features and has the potential to become the highest-selling SUV in the entire SUV category, including large SUV segment. The broking firm has retained its 'Buy' rating on Tata Motors Ltd stock, with a target price of Rs 786 apiece.

The two Nexon models were unveiled on September 1 and 7 September 7, respectively. The introductory prices for Nexon (ICE) range from Rs 8 lakh- Rs 13 lakh. The entry variant is priced higher by only Rs 10,000 or 1.3 per cent, which offers much higher value - along with a major technology upgrade, the model now offers six airbags as standard, Nomura India noted.

The Nexon EV price ranges from Rs 14.7 lakh-Rs 17.8 lakh. Its entry variant’s price has gone up by 25,000 or 1.7 per cent, which consumers will find attractive for the major upgrade, Nomura India added.

Tata Motors, as per reports, is planning to start building exclusive retail showrooms for electric vehicles under the name of Tata.ev. The company wants to provide a differentiated experience to customers and also volumes to reach a viable level for channel partners.

"The Nexon is currently the market leader in the compact SUV segment and we believe it will continue to rival popular compact SUVs such as Maruti's Brezza, Hyundai India’s Venue, Nissan India’s Magnite, Kia India’s Sonet and M&M’s XUV300. Since Nexon offers the best-in-class technology and features, we believe it has the potential

to become the highest-selling SUV in the entire SUV category," Nomura India said.

While the foreign brokerage is currently factors in 15,000 monthly volumes, potential sales can be even higher given the presence across powertrains petrol / diesel and EVs, Nomura India said.

"Overall, for Tata Motors, we expect PV volumes of 51,000/53,000 per month in 2HFY24/FY25F, which can have upsides on the success of Nexon," it said.

Meanwhile, Motilal Oswal Securities suggested a target of Rs 750 on the stock. The domestic brokerage said it is positive on Tata Motors given healthy recovery as supply-side issues ease (for JLR), along with a better mix, lower discounts and operating leverage.

"Tata Motors'India CV business is on a strong footing and is primed for a strong cyclical recovery in both M&HCVs (6 per cent CAGR over FY23-25E) and LCVs (4 per cent CAGR). Its refreshed product portfolio will enable a sustained recovery in its PV business (11 per cent CAGR), aiding market share gains," it said.

On Friday, shares of Tata Motors were trading 1.51 per cent higher at Rs 633.75 on BSE.

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