Tata Nexon facelift: What Nomura says on new launch, share price target

Tata Motors has announced the launch of second facelift for Nexon, which borrows multiple design cues from ‘Curvv’ concept with various updates relative to its predecessor, both inside and outside. The bookings will be opened from Monday and the launch date is set at September 14.

Nomura India said the Tata Motors' Nexon is currently the market leader in the compact UV segment and will continue to rival popular compact UVs such as Maruti Suzuki's Brezza, Hyundai India’s Venue, Nissan India’s Magnite, Kia India’s Sonet and M&M’s XUV300.

This segment, Nomura said, sells 87,000 units per month, on average, based on the May-2022-July 2023 average, and continues to see strong preference from consumers.

"Following the launch, we believe it has the potential to be India’s leading SUV by volume (15-20k units per month) depending on the pricing," the brokerage said while suggesting a share price target of Rs 786 for Tata Motors.

The compact UV will continue to be powered by a 1.2 litre turbo petrol engine and 1.5 litre diesel engine, along with either manual or automated manual transmission (AMT).

"The petrol engine gets four gearbox options, while the diesel version will get only two gearboxes. The company also introduced the new dual-clutch transmission (DCT) option. The UV comes equipped with various features such as a 10.25-inch full digital instrument cluster (top-end) with Android Auto and Apple CarPlay compatibility, air purifier, express cooling, connected car technology and over-the-air (OTA) updates, and automatic air- conditioning (AC)," Nomura India said.

The new Nexon will also have various safety features such as six airbags, central locking system, Electronic Stability Program (ESP), three-point seat belts on all seats, and parking sensors. On the exterior, it gets new accent lines on the body, split headlamps, and sequential LED daytime running lights.

"We maintain our Buy rating with SOTP-based target of Rs 786. The stock is currently trading at 4 times FY25 Ebitda, which we believe is attractive," Nomura India said.

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