Best EV Stocks in India for Long Term

Best EV Stocks in India for Long Term in year 2024

India pledged at COP26 to achieve net zero emissions by 2070. The nation plans to reduce carbon emissions intensity by 45% by 2030 compared to 2005.

The transportation sector is among the industries that contribute most to India’s greenhouse gas emissions. This emphasizes how urgent it is to quickly switch to electric cars to replace conventional vehicles.

So, which stock can take advantage of this EV revolution in India? In this post, we have got you covered.

Let us discuss the essential fundamentals and financials of some of these stocks.

TATA Motors

TATA Motors is assumed as a flag bearer of the EV revolution in India. The stock has been on a bull run for 1 year now. Rising from its 52-week low of ₹400 on 28-Mar-2023, the stock has recorded a 52-week High of ₹ 1,065.60 on 05-Mar-2024. This change transforms into a staggering growth of 166.4%. That is huge, right?

The Government Initiatives and policies to make India the upcoming EV market back the continuous growth of this multi-national conglomerate.

Let us discuss the fundamentals of TATA Motors. A fundamentally strong company can perform well in the long run.

The market capitalization of ₹ 3,80,439 Cr. positions TATA Motors as a large-cap company.
The company maintains generous profitability ratios:
- Return on Capital Employed (ROCE) stands at 5.95%.
- Return on Equity (ROE) stands at 5.62%.
The price-earnings ratio (P/E ratio) is 17, lower than its sector’s P/E ratio of 32.56. A low P/E ratio suggests that the stock may be undervalued.
The stock maintains a robust Earnings per Share (EPS). EPS TTM stands at ₹58.39 per share. A positive and growing EPS indicates consistent earnings and a healthy stock performance.
However, there is a concern regarding the debt-equity ratio. It stands at 2.77, higher than 1. This implies that the company’s assets are financed through debt, which could pose risks.
Promoter Share Holding decreased by 0.01% in the most recent quarter to 46.37%.
Tata Motors pays a dividend of ₹2 per share. The dividend yield is low at 0.19%.

Summing up, TATA Motors showcases strong profitability metrics and an undervalued P/E ratio. Concerns linger regarding its high Debt to Equity ratio and a slight decline in promoter shareholding despite maintaining a modest dividend yield. Best EV stocks can be invested through opening Demat account with ICICI Direct Securities.

Bajaj Auto Ltd

The flagship company of Bajaj Group is the world’s fourth-largest manufacturer of motorcycles. The company plans to house all its EV-related activities to focus on the EV market.

With a current market price of ₹ 8,879, the company maintains robust fundamentals. Let us have a look at them.

With a market capitalization of ₹2,51,437 Cr, Bajaj Auto is classified as a large-cap company.
The company maintains outstanding profitability ratios:
- Return on Capital Employed (ROCE) stands at 26.2%.
- Return on Equity (ROE) stands at 20.2%.
The price-to-earnings ratio (P/E ratio) is 33.97, higher than its sector’s P/E ratio of 32.56. This indicates the company may be slightly overvalued compared to its market peers.
Earnings per share (EPS) of Bajaj Auto stands at a robust ₹261.53 per share. This reflects consistent growth over the past 5 years and indicates sustained profitability.
The debt-equity ratio is zero. This indicates that the company is debt-free.
Promoter Share Holding decreased by 0.04% in the most recent quarter to 54.94%.
Bajaj Auto pays a dividend of ₹140 per share, with the dividend yield at 1.58%.

Despite a slightly overvalued price-to-earnings ratio, Bajaj Auto demonstrates robust profitability metrics. This includes consistent earnings growth, a debt-free status, and a modest dividend yield.

JBM Auto Ltd

The next company participating in the EV revolution in India is JBM Auto Ltd. The company is in the automotive business and manufactures sheet metal components. The key business divisions of JBM Auto include auto components & systems, buses and electric vehicles, EV charging infrastructure, and more.

JBM Auto boasts a market capitalization of ₹22,441 Cr. This categorizes it as a large-cap company.

o The Return on Capital Employed (ROCE) stands at 11.8%. Thus indicating the company’s efficiency in utilizing its capital.

o With a Return on Equity (ROE) of 12.9%, JBM Auto demonstrates its ability to generate profits from shareholder equity.

· The price-earnings ratio (P/E ratio) is notably high at 148.47. Hence surpassing its sector’s average of 32.56, suggesting potential overvaluation.
· Earnings per Share (EPS) TTM stands at ₹12.78 per share. This shows fluctuations, hinting at inconsistent earnings trends.
· The debt-equity ratio of 1.63 exceeds 1. Thus indicating that the company relies heavily on debt to finance its operations.
· Promoter Share Holding remains stable at 67.53% in the latest quarter. Thus reflecting consistent promoter confidence in the company.
· JBM Auto distributes a dividend of ₹1.30 per share. The dividend yield is low at 0.07%.

JBM Auto faces some difficulties, like having a lot of debt and earnings that go up and down. However, its strategic positioning and potential for adaptation could play a pivotal role in the evolving landscape of the EV transition in India.

Apar Industries Ltd

The company is the 3rd largest transformer oil manufacturer in India. It specializes in providing design, manufacturing, upgrading transmission lines, and testing of conductors globally. Apar Industries is the largest exporter of conductors and Transformer oils from India. Seems like the company is all set to seize the opportunity of the EV transition in India.

Let us talk about the fundamentals of Apar Industries.

Apar Industries has a market capitalization of ₹24,463 Cr. This positions it as a large-cap stock.
The company maintains excellent profitability ratios:
- ROCE stands at 51.1%, showing how well it uses its capital to generate profits.
- ROE stands at 32.3%, indicating its ability to generate profits from shareholder equity.
The price-earnings ratio (P/E ratio) is 29.42, lower than its sector’s P/E ratio of 69.65. Thus suggesting that Apar Industries is reasonably priced.
The company’s Earnings per Share (EPS) is consistently growing. It currently stands at ₹214.62 per share, indicating its strong long-term performance.
The debt-equity ratio of 0.14 is healthy, less than 1. This implies that its assets are mainly financed through equity.
Promoter Share Holding decreased by 2.87% in the most recent quarter to 57.77%. Thus indicating changes in promoter ownership.
Apar Industries offers a dividend of ₹40 per share for the current year, resulting in a dividend yield of 0.66%.

Despite a slight decline in promoter shareholding, Apar Industries showcases robust profitability metrics. Reasonable pricing and healthy financial indicators position it well for potential growth and stability in the market.

Summing up, Electric Vehicles, or EVs, are the future of India. Having said that, the country’s ambitious targets have tremendous potential for these stocks to emerge and grow in the coming years.

One can follow our regular threads on stocks and financial markets through my profile at Sandeep NIrvan