This automobile stock doubled investors wealth in the last one year! Do you have it in your portfolio?

This automobile stock doubled investors wealth in the last one year! Do you have it in your portfolio?

by 5paisa Research Team Last Updated: Dec 14, 2022 - 03:06 am 44k Views
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An investment of Rs 1 lakh in this stock last year would have turned to Rs 2.78 lakh today.

Tata Motors Ltd, an Indian multinational automotive manufacturing company has turned into a multibagger by delivering returns of 178.04% in the last one year. The share price which was trading at Rs 177.6 on 10 December 2020, closed at Rs 493.8 yesterday, on 9 December 2021, giving returns of 178% YoY.

Tata Motors is one of the country's largest original equipment manufacturers (OEMs) that provides an extensive range of integrated, smart and e-mobility solutions. Its diverse portfolio comprises an extensive range of cars, sports utility vehicles, trucks, buses and defence vehicles. As of FY21, the company accounts for 70% of the EV market share and is the owner of the number one EV model- Tata Nexon EV.

Automobile industry dynamics

Electric Vehicles (EVs) are all the rage now. Due to this, more and more automobile companies are placing their bets on electric vehicles fleet. EVs are witnessing an upward trend on the demand front and the EV market is estimated to reach a valuation of Rs 50,000 crore by the year 2025. Riding on this trend, many companies have announced their plans for introducing their EV models in the market. The rising trend of EVs draws support from the government as it aims to bring down carbon emissions and reduce dependency on conventional fuels such as petrol and diesel.

The announcement that turned the tide for the company

On 12 October, the company informed that it entered into a binding agreement with TPG Rise Climate, for raising Rs 7,500 crore from the latter and its co-investor ADQ. These funds shall be invested in a subsidiary of Tata Motors that will be newly incorporated. The new company shall channelize the funds into electric vehicles, dedicated BEV platforms, advanced automotive technologies and will create a portfolio of 10 EVs. In October itself, the share price of the company jumped from Rs 333.35 on 1 October to Rs 483.75 on 29 October, delivering returns of 45.12% in one month.

Bottomline

From the information mentioned above, we can conclude that the conducive environment caused by adapting to the latest trends, catering to the changing preferences of the customers along government support helped Tata Motors turn into a multibagger stock.

At 12.13 pm, the share price of Tata Motors Ltd was trading at Rs 493.55, which was a decrease of 0.05% from the previous day’s closing price of Rs 493.80 on BSE.

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