Tata Motors Surpasses General Motors in Market Capitalization: A New Leader Emerges
Tata Motors Surpasses General Motors in Market Capitalization: A New Leader Emerges
In a remarkable turn of events, Tata Motors has outpaced U.S. auto giant General Motors (GM) in market capitalization, reaching a valuation of over $50 billion. This impressive feat was driven by a 50% rally in Tata Motors’ shares since the beginning of 2024. According to the latest data, General Motors’ market cap stood at $49.6 billion, highlighting the significant rise of Indian automakers.
The surge in Tata Motors’ market value coincides with the company’s impressive financial performance. For the fiscal year ending March 2024, Tata Motors reported a 23% increase in revenue, reaching $52.6 billion, marking the first time the company has surpassed the $50 billion revenue mark. After struggling with losses from FY19 to FY22, Tata Motors returned to profitability in FY23, posting a net profit of $300 million. This positive trend continued into FY24, with a substantial net profit of $3.8 billion.
The latest boost in Tata Motors’ shares was further fueled by an upgrade from Nomura, which shifted its rating from “neutral” to “buy.” The brokerage highlighted the potential of Tata’s luxury brand Jaguar Land Rover (JLR) to enhance profit margins. Nomura’s note emphasized the strategic move of transitioning from premium to luxury, helping JLR maintain a competitive edge. The stock hit a fresh record high of ₹1,179.05 on the NSE, adding 3.4% in a single day and contributing to a five-day gain streak totalling 16%.
On the other side of the spectrum, General Motors has faced a decline in stock value, losing nearly a third since its peak in January 2020. The company faces challenges despite positive quarterly results, driven by strong sales of both traditional and electric vehicles. Morgan Stanley recently downgraded GM’s stock from “overweight” to “equalweight,” citing industry-wide price pressures, potential risks associated with electric cars, and challenges in the Chinese market.
Tata Motors’ recent achievements also include surpassing Maruti Suzuki to become India’s largest carmaker by market capitalization. Tata Motors’ market cap rose to Rs 3.159 lakh crore, overtaking Maruti Suzuki’s Rs 3.13 lakh crore. This surge was attributed to record sales of Jaguar Land Rover vehicles in Q3, particularly the popular Range Rover, Range Rover Sport, and Defender models, which accounted for 62% of the wholesale.
