Tata Motors Annual Report 2023: Top highlights apart from JLR transformation

Tata Motors Annual Report 2023: Tata Motors, in its Annual Report 2023, highlighted that its flagship unit, Jaguar Land Rover's (JLR) roadmap for electric vehicle (EV) transition would be driven by three platforms, viz., a) the Electrified Modular Architecture (EMA) EV-only platform, b) the flexible Modular Longitudinal Architecture (MLA) platform, offering flexibility between Internal Combustion Engine (ICE), hybrid, and pure-electric; and third, the JEA for all electric Jaguars.

Apart from sharing the strategy and roadmap for JLR's transformation, the auto major touched upon the company's plans in other areas too. Here's a look at some of the key ones you should know:

Net-Zero emission goals

• It has committed to ambitious science-based targets, viz., a) to reduce greenhouse emissions by 46 per cent in its operations and by 54 per cent per vehicle across its entire value chain by 2030, and b) to achieve carbon net zero goals by 2039.
• The central focus of JLR’s strategy is the transition to an electric future across all its brands. This transition encompasses not only electric vehicles but also the development of a comprehensive supporting ecosystem. Plug-in electric hybrids play a crucial role as a stepping stone for both JLR and its clients in this journey towards electrification. The Battery Electric Vehicles (BEV) Range Rover (RR) and RR Sport are on track for 2024 launches and Jaguar for deliveries in 2025, notes brokerage Motilal Oswal Financial Services.
• By 2030, all nameplates will offer pure-electric options and are targeted to account for 60 per cent of their retail sales.

Changes in the retail format

Tata Motors exploring new modern luxury physical retail designs, showcasing immersive experiences. This new format has been introduced at its Mayfair-London Boutique and in five cities in China.

Leveraging Software over the air (SOTA)

For the new models such as the RR, RR Sport, and Defender, which have more updateable electronic control units (ECU) per car than any other production model on sale, the SOTA feature was originally developed to update the infotainment system. However, this enables unprecedented scope to enhance the vehicle remotely, and SOTA now updates a wide variety of vehicle systems, from the engine, braking, and steering systems to transmission control for four-wheel-drive and advanced driver assistance systems (ADAS), such as Adaptive Cruise Control, the brokerage notes. 

Cost Inflation impact of nearly 370 bps

Inflation accounted for nearly GBP 850 million (or 370 bps) of increased costs in FY23, with cost increases coming from higher commodity prices (~150 bps), energy costs (70-80 bps), semiconductor prices (~110 bps), and labour and other costs (30-40 bps), Tata Motors said.

Tata Motors stock: Should you buy, sell, or hold?

Analysts at Motilal Oswal Securities say that the stock trades at 19.3x/16.2x FY24E/FY25E consolidated price to earnings (P/E) and 5x/4.2x EV/EBITDA. "We reiterate our BUY rating with a TP of nearly Rs 700 (June 25E-based SoTP)," the brokerage said in its report dated July 10.