Disc: Have started buying Tata Motors DVR and intend to add more
I am not getting into detailed financials as that is available in public domain.
I want to look at this as very high level valuation exercise as market seems to be mis-pricing future opportunities.
It is JLR’s electric vehicle i-Pace which seems to have already achieved a booking of 20,000 vehicles and is likely to give a tough competition to Tesla. This compares very well with Tesla selling 30,000 every Q.
Now Google has tied up with JLR to launch a driveless version of the vehicle, and this will be Google’s premium driver less car.
Tesla has a MCap of 50B USD. Assigning even one-tenth valuation to Tata Motors for i-Pace makes it approximately 30,000 crore.
Now at 1.13 lakh crore TataMotors+JLR+Investments-Debt itself appears undervalued valued due to concern around JLR future volumes. Let us not forget that even Ashok Leyland is valued at 43,000 Cr and Mahindra at around 1 lakh crore.
So, i-Pace just seems to nice optionality on already undervalued stock.