The commercial vehicle (CV) segment of India’s auto sector plays a crucial role in the country’s logistics, infrastructure, and industrial development. With the growing demand for freight transportation, e-commerce, and infrastructure projects, the sector is expected to witness substantial growth. Major companies operating in this space include Tata Motors, Ashok Leyland, Eicher Motors, and Mahindra & Mahindra.
The rise in urbanization, government initiatives like infrastructure development, and the adoption of electric vehicles (EVs) are expected to drive the future potential of the CV market. Additionally, the government’s focus on highways, expressways, and logistics infrastructure presents long-term opportunities. However, challenges include fluctuating fuel prices and emission norms, pushing the need for more fuel-efficient and eco-friendly models.
Share Price
The shares of Tata Motors Limited closed at Rs. 753 up by 1.38% from its previous close of Rs. 742.75. The stock also touched an intraday high of Rs. 759.7 corresponding to 2.28% as of January 23, 2025.
Recent Update
Tata Motors Restructures CV Business Ahead of Planned Listing
Separate Entities for Passenger and Commercial Vehicles
Tata Motors is restructuring its commercial vehicle (CV) business, separating it into two independent entities ahead of a planned public listing in the next financial year. This move is aimed at allowing the business to chart its independent territory and reach its aspirations, as per Girish Wagh, executive director at Tata Motors.
Achieving Resilient Financial Outcomes
The restructuring exercise, which received critical inputs from N Chandrasekaran, chairman of Tata Motors, and chairman of Tata Sons, is expected to be completed ahead of the listing of the CV entity. This will help the CV business achieve more resilient financial outcomes through the cyclical swing characteristic of the truck business, said Wagh.
Eight Sub-Segments Identified
Tata Motors has identified eight sub-segments within the CV business, including the truck business, heavy and medium commercial vehicles, buses and vans, and small commercial vehicles. The company has said that each of these sub-segments is now operating independently.
Expansion into New Markets
Tata Motors’ CV business will actively pursue plans to expand beyond South Asia and Africa into North Africa, the Middle East, and ASEAN countries by developing suitable products, distribution, and financing, according to Wagh.
Challenges Faced in 2024
Election-driven uncertainty, reduced infra spending, and a slowing economy dented truck and bus sales for Tata Motors in 2024, impacting the company the most. While its sales in the domestic market dropped 5.3% from a year earlier to 345,928 units, market share fell to 34.43% from 36.42% during the period, as per vehicle registration data from the Federation of Automobile Dealers Associations.
Separate Balance Sheet for Greater Transparency
An analyst from a big brokerage house stated that a separate balance sheet will bring greater details and more transparency. It would be good if the company provided segmental performance within the CV business after the listing, as this would help investors to better understand a valuation approach.
Written By: Dipangshu Kundu
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