What is your own sense, you think this guidance cut is much in the price and more importantly what do you think has led to this?
Deven Choksey: Well, I believe that whatever the guidance cut has come, it is based on two or three things. One, of course, we all know about the uncertainty under which this particular environment is currently, particularly on the tariff front, as well as the free trade agreements, etc.
On this subject, they have become little bit more cautious while cutting down the guidance. But to me, everything seems to be in price because more importantly when you look at the company from a future perspective, when you start seeing the company as a separate company for commercial vehicle, domestic portfolio passenger vehicle is separate, JLR portfolio is a separate portfolio, and all in all put together their investments into the other entities also starts giving them the monetisation value.
So, in my viewpoint along with the EV portfolio, which is also expanding particularly even for JLR, I believe everything seems to be in the price. On the contrary, given the kind of road map that they have laid down for the JLR and a Range Rover electric vehicles, it sounds pretty exciting probably, which could possibly generate higher amount for the company because EV segment, this commands higher amount of the cases also in the industry.
So, from perspective of looking at this company, I would think that the JLR and the brand once it is separately available for Tata Motors in the passenger vehicle, could possibly make a rerating case as far as the company is concerned.
But at what price point do you believe that it can once again become an attractive bet? Given the fact that the stock has already fallen below that 700 mark, do you believe in some more correction from now one can actually look for a buying opportunity?
Deven Choksey: In a bear case scenario, somewhere around 600 would be the opportunity, but in a best case scenario around 660 should be a good price to enter into the stock which is quite closer to yesterday’s closing price.
Otherwise, those who are waiting for little long-term investment point of view, even if they buy today, probably they are getting the appreciation over a two-year period or two-and-a-half-year period which is a significantly large appreciation.
Largely because of the fact that whenever there is such kind of uncertainty, that is when such a pricey assets that you get at a discounted valuation. Today, when we look at Tata Motors respective portfolios, be it commercial vehicle, be it passenger vehicle, domestic or electric vehicles, and the JLR, each of these portfolios are today quoting on a sum of the part valuation.
That is why I believe that everything is in price, maybe this particular thing is an opportunity today when the stock price is down, I think a good buy and stay invested.
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