In a chat with Zee Business Managing Editor Ajay Bagga, the expert said that the current valuation of Tesla shares is tremendous. Ajay Bagga said it is good news for India that the company is entering Indian markets. Such big companies like Tesla entering in Indian market with superior Technology will change the entire ecosystem of the country. India can also be a hub for Tesla, which will help to sell vehicles not only in India but also abroad, Bagga said. Now, the Auto and Auto Ancillary sector is getting rerated due to Tesla’s entry into Indian market. Many battery making companies have seen some spark today after Tesla news broke out. Many local battery companies and other related companies will get good business from Tesla. It could be beneficial for Tesla as well, as they are de-risking from China.  

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Bagga said that it is extremely good news for Indian markets because after Apple, Samsung, Hyundai and many other big names, Tesla too has come and is all set to build its manufacturing plants here.

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Bagga highlighted the fact that there is a lack of financial capital in India, otherwise India has an abundance of human capital. Many engineers graduate every year in India. India has an abundance of natural resources. Local taxes, higher power charges, high bank loan rates and capacity of ports are certain issues in India. Bharat Forge and Mahindra have been telling for a while now, that it takes a lot of time to get their products from the ports while China resolves this issue in a couple of days. Adani Ports is working effectively and efficiently on their ports business as well to serve Businesses like Tesla.

General Motors shares did extremely well today after they announced that the company will enter the Electric Segment. Research Reports with a price target of $800 on Tesla, such valuations are based on analysis that the company will increase its manufacturing capacity to 50 lk cars in 2030 from 5 lk cars at present. This kind of growth is possible in the India Auto sector as well going forward.

Lithium ion batteries were broken and recycled in India till now and from here on, India may start manufacturing them. 

Overall, it is a huge positive for India and the entire Auto sector is a buy at current levels. Now, 2-wheeler companies have inventory left of only 20 days when compared to 4 to 5 months earlier. Also, Inventory of car companies is less than 1 month. Fast moving cars at the lower end and SUVs at the middle end have a waiting period of 8 months. Auto sector is in take off mode, stock prices have moved up so far and will continue to move up going forward.