The summary clearly analyzes how the Maharashtra elections could influence the Indian stock market. It touches on crucial points: Policy Continuity vs. Uncertainty : Markets favor predictability. A BJP-led victory will likely ensure ongoing policies focused on infrastructure, which investors see positively. Conversely, shifting to Congress-led governance might introduce temporary uncertainty as markets evaluate potential policy changes. Sectoral Shifts : Maharashtra's economic importance means election outcomes could directly impact key sectors. For instance, infrastructure and real estate might react based on government priorities and policy directions. FPI Activity and Market Trends : The pullback by FPIs in recent months highlights global factors, but local political clarity—especially favoring business-friendly governance—could help stabilize market sentiment. Broader global market trends remain critical in shaping overall movements. ALSO READ, Benefits of Tax plan...
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Top 5 Electric Vehicle (EV) stocks for future!! Are EV stocks a good buy? Detailed Analysis.
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Hey friends!
You all are really interested in Electric
vehicles. All of you want to know about it as everybody talks about it. You
want to know this industry's opportunities and challenges in the future. Also,
you want to know about the companies directly/indirectly linked to the EV
segment.
In today's article, we will discuss this topic in detail so
that after this article you have full information concerning Electric vehicles
or companies or 5 stocks that trade on the market and have a focus on the EV
segment. We made the curation based on three categories such as
Electric Vehicle Producing Stocks,
Lithium-Ion Battery Manufacturing Stocks
Electric Vehicle Charging Infrastructure Stocks.
India's auto industry.
Let's quickly start today's article. India's auto industry
is the 4 largest in the entire world. India's
Auto industry is expected to move from 4th largest to 3rd largest by the end of
2021.
Besides, Auto industry contributes 7.1% to India's total
GDP. The national mission plan for electric mobility 2020 is a research report
that tells us that currently, two-wheelers dominate India's total auto
industry.
This has a 75% contribution to the total volume. Also, it is
considered that passenger vehicles dominate India's car market. As people's
incomes are rising, the demand for passenger cars is expected to boost further
according to this report.
After this, I will talk about Electric vehicles. The sale of
electric vehicles is less than 1% out of total sales of the Auto sector. But
some experts say that in the coming time this number will rise from 1% to 5%.
But this is an expectation. It is not a fact, yet.
In the coming times, we will know how this percentage will
improve further. 5 lakh two-wheelers currently operate in India in the EV
category. But the number of electric cars has not yet reached lakhs. Their
number is in the thousands.
Now let's talk about something quite important for you to
understand - The challenges of the Electric vehicle segment that it can hope to
overcome in the future.
The 1st challenge for this industry is that of charging
infrastructure.
Cars will be manufactured, people will buy them also, but with
non EV cars, you stop at a petrol pump to add fuel. But in the case of Electric
vehicles, the charging infrastructure has not developed on a sufficient level.
This is a challenge for this industry.
In the coming time, we will see how this infrastructure will
develop. Some companies have started working on this problem. The names of these companies are - Tata Power and NTPC.
The
2nd challenge for this industry isthe upfront cost.
Assume that you go to buy a car. You get a diesel/petrol car
for Rs. 5 lakh. But the same car in the electric segment will be for 10 lakh. Over
here customer will take into concern his/her money involved. This is a
challenge for the electric vehicle segment.
The upfront cost in terms of battery is quite high. Hence
any electric vehicle increases the upfront cost for the buyer. Besides this
when you buy a car, the component is quite important for you. We are still
heavily dependent on imports for Electric vehicle segment components. Their
manufacturing has not reached an appropriate level. These are some challenges
for the entire EV segment that I discussed. But opportunities emerge out of
challenges. These companies can overcome these challenges and can derive demand
in this industry through various opportunities in the emerging times.
Various opportunities in the emerging times.
The first demand driver for an electric vehicle is the
government's procurement. This can be a game-changer for demand and industry. It
s expected that the government might change its policy and focus on
four-wheelers electric vehicles (as national level/ other governments started
procurement as in case of electric buses)
This can result in a great demand boost. Besides this, a lot
of big companies operate in India like taxi services. If they focus/procurement
for the electric segment increase then a demand can be derived from here. You will know this in the coming times. This is a
possibility that I wanted to share.
The second demand driver emerges out of
challenges. Assume that great technology comes in the future which reduces
upfront cost or charging infrastructuregets developed. This can boost the
private consumption of EVs in the coming years. This can drive demand. The next
demand driver for the EV segment could be stricter emission norms. Because of
this, different companies that manufacture cars had to make a lot of changes. This
increased their production cost.
In the coming years, as the emission norms get strict, the
demand for EV will automatically rise.
Next is the government's FAME2 Scheme.
Under this initiative, the government has brought Rs.10,000 crore to be used for
electric vehicles like procurement, charging infrastructure, etc. This step
taken by the government is a signal that great traction can be there for
electric vehicles.
According to a MarketWatch report, about 40% CAGR growth can
be seen in charging infrastructure in the next 5-6 years. The government can
support organizations in different ways that are developing charging
infrastructure.
So this was the information regarding the entire industry,
electric vehicles where I told you about challenges and opportunities/demand
drivers.
Top 5 Electric Vehicle (EV) stocks.
Now, let's move to the second part of the article where we
will discuss 5 stocks that are directly/indirectly linked to this industry.
These 5 stocks are divided by me into three categories.
The 1st category is auto manufacturing companies that
produce EV vehicles.
2nd category is Lithium-Ion Battery Manufacturing companies
(as I told you that the upfront cost of EVs is quite high due to the battery).
The 3rd category is the company that runs its business in EV
charging infrastructure.
Without taking much time let's talk about the 1st
stock.
The first company that does EV manufacturing/can do
expansion in this space is Mahindra & Mahindra. It is an automaker company
of India whose business is well spread out in different sectors.
This company manufactures passenger vehicles and tractors.
In recent times, the company has given a remarkable return to its investors. The
passenger segment of India as I told you about in beginning, dominates the
automobile sector. Mahindra & Mahindra has a 7.1% market share in this
segment.
Also, this company is considered a pioneer in the EV segment
as it brought its first EV car in 2001. Its name was Mahindra Reva.
So you can understand that this company started focussing on
EV quite early. In recent times this company has opened its R&D centre in
Bangalore that majorly focusses on EV manufacturing. Not just Reva, but
Mahindra & Mahindra manufactures 5 other electric vehicles. In recent times
the company has also launched eVerito that is generally seen in taxis.
Recently this car has been decently successful. Besides
this, the company has announced other cars in the Auto expo that can operate in
the EV segment. In order to perform well in the EV segment, this company is
trying to form a strategic alliance with global manufacturers. This company has
already started talks in this regard. We will update you if there's any major
development in this regard.
The share price of Mahindra & Mahindra is around Rs.736.
Its market capitalization is around Rs.91,000 cr. In the last year, Mahindra
& Mahindra has given 40% return to its investors.
I will not talk about the P/E ratio of this company as it is
making a loss in the last 12 months. We will update you with the performance of
the company from time to time.
In the last year, this company has given a tremendous return
to its investors. The debt-equity ratio of Mahindra & Mahindra is around
1.76.
The second company is Tata Motors. Its name emerges whenever
we talk about the EV segment. The total share of Tata motors in the passenger
segment is 4.8%. Although this company has booked a loss recently, the shares
of this company have given a great return to its investors in recent times.
Earlier also I have told you about Tata Motors. It has a
huge dependency revenue on Jaguar and Range rover. You can watch our other article
for this. But an interesting thing over here is that a 108% jump was seen in
November sales of Tata Motors. In the EV segment, Tata Motors is a new entrant
after Mahindra & Mahindra. Its major focus area is electrical buses. The
government had started procurement in this space. In the passenger segment,
Tata Motors offers 3 EV cars namely Tigor, Tiago, and Nano. These three are EV
variants that you can buy. Further Tata Motors has a huge focus on electric
buses. It is expected that the demand of 4 lakh buses can be there in the
coming time.
This is just an expected number where Tata Motors has a lot
of focus. Over here, you would want to know the last three-quarter sales of
three Tata Motors EV cars in the passenger segment. In the first, second and
third quarter its EV sales were 300, 500 and 800 respectively. It is expected
that in the fourth quarter that this number will rise from 800 to 1,400. The
current share price of Tata Motors is Rs.237. The market capitalization of the company
is around Rs.60,000 cr. The last one-year return of this company was negative
0.33% for the investors. Tara Motors has a huge debt, as its debt-equity ratio
is around 2.2. The second category of stocks comes in the battery segment. The
name of this segment is Lithium-Ion Battery. These batteries are used in EVs.
Next, I will talk about two such companies that manufacture
these batteries/will do in the future. The first name is Amara Raja Batteries.
This company makes lead-acid batteries that are widely used.
Primarily these batteries are used in industries. Besides this, they are used
in automobiles. The major areas where Amara Raja's batteries are supplied are
telecom, railways, solar, etc. The automobile sector replacement batteries have
not seen much growth quite lately. But in recent times a pick-up has been seen
in the automobile sector. This can lead to demand expansion. Let me quickly
take you to my screen. I will show you the projections of replacement batteries
as per the Society of Indian Automobile Manufacturers (as per Nomura estimates)
In 2016, about 16.3 million replacement batteries were used.
In FY 2019 this number rose to 20.3 million. In FY 2020, this number was 22.2
million and in FY 2021 this number is expected to be at 23.5 million.
So this was a discussion regarding lead-acid batteries. But
as I told you that this company can manufacture Lithium-ion batteries in
future. Hence this company has set up its production plant in Andhra Pradesh. Besides
this, the company is closely working towards technology with the IIT-Chennai.
The share price of Amar Raja batteries is around Rs.994.
The market capitalization of this company is around
Rs.16,000 cr. In the last one year, it has given more than 30% return to its
investors. The P/E ratio ofAmar Raja
batteries is 30. The industry has a P/E ratio of 46. This company is virtually
debt-free. An interesting fact is that in the last 5 years its revenue and
profit CAGR growth is above 10%.
Now let's talk about the fourth company on the list. It
directly works in the lithium-ion sector. The name of this company is Exide Industries.
This company makes lead-acid batteries that are used in
different industries and the automobile sector. This company has another
business of life insurance. This is included in this company. Now let's talk
about Exides's revenue breakup. As you can see on my screen the revenue breakup
of Exide industries is visible. Its 73% revenue is contributed by the Automobile
sector. After this major revenue is contributed by industries with a 26% share.
Exide has done a strategic alliance (Joint Venture) with a
Switzerland company in a ratio of 75:25. This company has set up a plant in
Gujarat in this regard. They will manufacture Lithium-ion batteries in the
future. The CAGR growth of total revenue for this company is 9%. While its net
profit has grown at 5% as compared to Amar Raja Batteries which has shown a 10%
CAGR growth in the last 5 years.
The current share price of Exide batteries is Rs.204. In the
last one year, it has given a positive 7% return to its investors. The market
capitalization of this company is Rs.16,000 cr. The P/E ratio of this company
is around 27. While the OEM industry has a P/E ratio of 46. As compared to this,
the company has a low P/E ratio. As compared to the P/E ratio (30) of Amar Raja
batteries this company has a slightly low P/E ratio. The debt-equity ratio is
0.07. The debt on the company is negligible. So this was the discussion
regarding batteries.
Now let's talk about the third category. Here we will talk
about today's 5th stock.
The name of this industry is charging infrastructure. If
electric vehicles operate well in the future then Tata Power will take the lead
in developing charging infrastructure. This is the largest integrated power
company that runs a power generation, transmission business. In recent times
this company is shifting its focus towards charging infrastructure.
The energy generation of this company is 10,875 megawatts.
Out of this 32% generation is from clean energy i.e. solar, wind, etc. In
relation to EV charging infrastructure, this company has set up 170 charging
points. In the future, the company is thinking of expanding this.
Another interesting thing about this company is that it has
signed MoUs with petrol pump companies. Here I have used the word petrol pump
as you can relate to this. As you have to go to the petrol pump for fuel, then
if you get charging infrastructure over there itself, the EV vehicle charging
problem would be solved.
Following this Tata Power has signed MoU with IOCL, HPCL,
etc that operate petrol pumps in India. The current share price of Tata Power
is Rs.83. In the last one year, this company has given a great 47% return to
its investors.
Key Ratios
Annual
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
EBIT Margin (%)
36.48
34.23
37.95
38.13
37.50
29.53
27.34
24.89
25.86
22.71
23.44
19.60
19.25
15.67
19.14
23.02
23.94
Pre Tax Margin (%)
4.53
28.43
-43.05
7.44
19.94
17.46
17.28
17.80
19.80
16.07
17.72
15.38
16.41
11.96
15.88
18.44
17.44
After-Tax Margin (%)
1.91
21.42
-41.80
5.74
15.58
11.64
11.05
10.71
13.76
13.60
13.20
12.70
14.72
14.16
13.40
14.06
12.55
Return On Capital Employed (%)
10.82
11.09
12.25
9.15
11.74
9.39
10.28
10.12
10.30
8.68
9.95
10.57
10.38
7.93
10.45
11.23
14.78
Return On Equity (%)
1.07
12.46
-24.25
2.39
8.82
6.42
7.26
8.35
9.78
8.37
8.91
10.66
10.88
11.63
11.07
10.82
10.51
Long Term Debt To Equity (%)
71.39
61.66
62.54
53.32
58.52
55.92
54.66
68.93
57.49
54.10
55.18
52.75
34.43
60.31
49.56
55.58
33.85
Sales (Cr)
7,726.39
8,255.25
7,536.59
6,924.16
8,696.94
8,677.69
8,627.04
9,567.28
8,495.84
6,918.48
7,104.22
7,257.05
5,909.60
4,918.53
4,553.23
3,918.85
4,197.73
Sales % Chg
-6%
+10%
+9%
-20%
0
+1%
-10%
+13%
+23%
-3%
-2%
+23%
+20%
+8%
+16%
-7%
-
Net Income (Cr)
148.12
1,768.70
-3150.52
397.54
1,354.99
1,010.29
954.08
1,024.69
1,169.73
941.49
938.45
922.20
869.90
696.80
610.44
551.36
526.85
NI % Chg
-92%
+156%
-893%
-71%
+34%
+6%
-7%
-12%
+24%
0
+2%
+6%
+25%
+14%
+11%
+5%
-
Book Value/Share (INR)
50.88
52.46
48.02
61.34
56.75
58.15
55.31
49.85
48.62
45.70
42.83
37.67
34.94
29.21
26.88
24.84
24.42
Return On Assets (%)
0.39
4.63
-8.63
0.97
3.91
3.01
3.12
3.64
4.65
4.43
4.94
5.70
6.65
6.06
6.30
5.89
6.40
Asset Turnover Ratio (%)
20.53
21.64
20.64
16.95
25.12
25.85
28.24
34.05
33.82
32.62
37.45
44.88
45.19
42.79
47.04
41.86
51.02
Inventory Turnover Ratio (%)
12.17
14.25
15.89
10.32
12.62
12.97
12.14
12.57
9.94
11.07
12.05
11.27
12.48
12.41
10.30
13.19
13.40
Interest Coverage Ratio (%)
1.87
1.88
2.00
2.00
2.85
2.45
2.72
3.51
4.27
3.42
4.10
4.65
6.79
4.22
5.86
5.02
3.69
Dividend Payout Ratio (%)
237.63
19.90
-12.24
95.98
25.97
34.84
35.47
26.65
25.38
31.53
30.37
27.75
27.74
27.01
27.58
26.95
26.32
Earning Retention Ratio (%)
-137.63
80.10
112.24
4.02
74.03
65.16
64.53
73.35
74.62
68.47
69.63
72.25
72.26
72.99
72.42
73.05
73.68
Current Ratio (X)
0.51
0.55
0.58
0.52
0.72
0.59
0.46
0.83
1.32
0.89
2.67
1.73
1.82
2.27
2.21
1.91
1.34
Quick Ratio (X)
0.45
0.51
0.55
0.46
0.62
0.49
0.37
0.67
1.10
0.69
2.41
1.49
1.60
2.05
1.88
1.69
1.12
So this was today's article where we talked about the EV
segment and its 5 stocks. I hope that you liked today's article. If you liked
it then comment below your favourite stock out of these
stocks where you are thinking of investing. State your reason along with the
comment so that our viewers learn from your comment and we can build a
community where we learn from each other. If you have not subscribed to DEV’S INVEST NOTES - BLOGOSPHERE then surely do it to not miss any of our important articles.
Happy investing!
THANK YOU
Disclaimer: Friends, we don't recommend buying and selling of any stocks. Our articles are totally supported educational purpose.
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