Rakesh Jhunjhunwala’s favorite stock Tata Motors gained over 2.5 per cent to Rs 511.40 apiece on BSE after the company announced Jaguar Land Rover’s (JLR) multi-year strategic partnership with Nvidia. The company will jointly develop and deliver next-generation automated driving systems plus AI-enabled services and experiences for its customers. Jhunjhunwala held 3.92 crore equity shares of Tata Motors at the end of October-December 2021 quarter. JP Morgan has initiated its coverage on Tata Motors with an ‘overweight’ rating. It has pegged a target price of Rs 630, a rally of 26 per cent from the previous close.
In traded volume terms, a total of 3.7 lakh shares traded on BSE, while 1.05 crore shares exchanged hands on NSE, so far in the trade on Thursday. The company, in a BSE press release, said that starting in 2025, all new Jaguar and Land Rover vehicles will be built on the NVIDIA DRIVE software-defined platform — delivering a wide spectrum of active safety, automated driving and parking systems as well as driver assistance systems.
JP Morgan believes that Tata Motors can achieve its zero net debt target by FY24 (vs Rs 640 billion currently) by continuing to execute its self-help strategies of mix improvement and right sizing of costs or investments in JLR; model launch led market-share gains in India PV, and strengthening its CV leadership during a cyclical recovery. The brokerage firm has also set out a bull case price target of Rs 783, a 57 per cent potential rally in the stock. JP Morgan believes that the stock could attain that target on TPG’s valuation for the India PV EV business, and management guidance of 10% EBIT at JLR by FY26. It also said that JLR is not lagging in electrification compared to its ICE peers.
Tata Motors said that Jaguar Land Rover will also leverage in-house developed data centre solutions with NVIDIA DGM for training AI models and DRIVE Sim software built on NVIDIA Omniverse for real time physically accurate simulation. Jaguar Land Rover aims to achieve net-zero carbon emissions across its supply chain, products and operations by 2039. “Next-generation cars will transform automotive into one of the largest and most advanced technology industries. Fleets of software-defined, programmable cars will offer new functionalities and services for the life of the vehicles,” Jensen Huang, NVIDIA founder and CEO, said.