Tata Motors, Olectra Greentech or JBM Auto: Which will be a better EV play? Dharmesh Kant answers

Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, expects most electric vehicle (EV) players can deliver promising returns. The market expert firmly believes that Tata Motors will be a better player in the segment, especially after the negative news flow on Olectra Greentech Ltd post-cancellation of an e-bus order by the Maharashtra government.

"If you look at Olectra, there has been a complete change from what they used to do a few years back into the EV space. But the company's failure to meet delivery deadlines is surprising. Such news never does well for any company because it creates doubt regarding the execution capability and competence capacity. The reason is that the company has to compete with Tata Motors, which is also in the EV space and supplying the same kind of buses. As far as JBM Auto is concerned, it has been established play in the auto ancillary space right from the inception of its business and has been doing fairly well. If I have to put my money, I would still go with Tata Motors Ltd, given the valuation comfort," he told Business Today on Tuesday.

"At the same time, the other vectors like Europe, China and the US are opening up now. Tata Motors is likely to walk into a more smoother ride from hereon with a lower interest rate trajectory everywhere across the globe as the tariff thing is getting settled. So, Tata Motors would be a better bet," Kant added.

For JBM, the market specialist advised investors to stay put as the company has delivered decent returns. "Though it's expensive compared to the valuation multiples of others in the same basket. But, because of its diversified business into both the forays (EV and ancillary), it will continue to command a premium valuation," Kant underscored.

"Sometimes what happens any negative news for one company favours counterparts in the same basket. That rub-off effect will also happen for JBM and Tata Motors. With this kind of news flow, most funds are likely to pull out of their money from Olectra but the allocation has to get reinvested. Then, the choices are limited and that benefit will also happen for both these companies," he further said.

Meanwhile, exchanges BSE and NSE have sought clarification from Olectra regarding the e-bus order cancellation. A response from the company was awaited at the time of publishing this story.