Investing into the automotive industry can be quite beneficial. The two main companies that can be considered key market players in the Indian market are Tata Motors and Ashok Leyland, which potentially represent some investment opportunities. In this article, we shall discuss about Tata Motors and Ashok Leyland Ltd., so you may be able to know which of the two companies is more appropriate to invest in.
Tata Motors:
Tata Motors Limited started in 1945 as the largest car company in India, and it deals in cars and commercial vehicles, namely cars, trucks, buses, and electric cars. Tata Motors has been at the forefront of leading the campaign for electric vehicles in India and has positioned itself in the right place with such dynamism and competitiveness. Tata Motors is indeed one of the best companies innovating and expanding its business. Currently, Tata Motors share price is approx. 962/-.
Ashok Leyland:
It is one of the oldest firms that deals in the production of commercial vehicles in India. It was initially incorporated as Ashok Motors Limited in 1948, with its operations starting the same year. It was originally set up decades ago, in the year 1950, by Austin Motor Co. of England to produce boats. It was established in 1948 and began with the name Ashok Motors Ltd. It was renamed Ashok Leyland in 1955, and the company got its floating stock at the Bombay Stock Exchange in 1976.
Performance and market share
Revenue and profitability:
Tata Motor’s revenue for the consolidated year was ₹314,500 crores, while the net profit it earned was ₹10,000 crores in the financial year 2022–23. The firm has been experiencing enhanced revenue growth rates since it deals with many products and is an international firm.
According to the latest report, Ashok Leyland’s FY22–23 revenues stand at ₹ 70,000 crores with a net margin of ₹ 3,500 crores. The analysis of the key ratios shows that the company is still in quite good condition, and this is because the company has a leading position in providing M&HCV segments and has developed a wide customer base within the domestic markets.
Market Capitalization:
Tata Motors operates in many businesses around the world, with a market capitalization of ₹1,75,000 crores.
Ashok Leyland boasts a market capitalization of about ₹35,000 crores, further establishing its dominance in the Indian marketplace of commercial vehicles.
Investment Comparison
When one looks at the history of the Tata Motor share price and the Ashok Leyland share price, certain aspects should be taken into consideration. Tata Motors presents favourable growth prospects since the firm has operations in different global locations and boasts of being a leader in the EV market.
However, the latest strategies adopted by Ashok Leyland as a principal player in the commercial vehicles, defence, and power solutions sectors and its growing product range make it quite competitive.
Conclusion
The two companies are also strong on their own, and the decision on whether to invest in Tata Motors or Ashok Leyland share price should depend on the ability of the investors to bear the risks in addition to their investment objectives. The reason is that Tata Motors gives diversified growth opportunities across different locations for different segments, and Ashok Leyland gives focused growth opportunities with operational HR concentration in commercial vehicles and allied services.
Follow our WhatsApp channel
