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9 Best Long Term Electrical Vehicle /EV Sector Stocks to Invest Systematically in India

(Published on 22-Feb-2021)
The souring of fuel prices is the new buzz word now in India, in fact in all countries across the Globe. This again telling us the importance for looking towards alternate fuels. When coming to alternate fuel segment, the Electrical energy segment is giving promising future for cheaper and reliable energy resource. The recent developments in the Electrical vehicles and Batteries are also giving us a hope for best alternative fuel to Automobile Industry. To decrease the dependency on expensive traditional fuels such as Petrol, Diesel etc., the Government of India is fully dedicated to make India a 100% EV nation by 2030. All these factors contributing for a revolution in EV segment and it is about to accelerate in India now. Hence, the Electrical vehicle segment would become Multi-bagger stocks in the near long term.

Why EV Stocks are to Buy / Invest now?

  • The most important thing is that the EV vehicles could create $300 billion domestic battery market by 2030
  • The Govt. has been continuously pinching the domestic auto markets for manufacturing electric vehicles to ensure the successful implementation
  • There is a demand for electric mobility as the roll-out for same is being targeted by 2023 for 3-Wheeler, 2025 for 2-Wheeler and 2030 for 4-wheeler to replace from current ICE
  • Also Govt. introduced FAME 2 scheme (Fast Adoption and Manufacturing of Electric and Hybrid vehicles) which provides subsidy for EV buyers having an outlay of Rs. 10,000 crores
  • As compared to other countries, the market share of EV is extremely low and having great potential to grow
  • The Indian Govt. is fully dedicated to make India a 100% EV nation by 2030
  • Auto Industry contributes 7.1% to India GDP and India is 4th largest Auto Industry in the world. By end of 2021, India can become 3rd largest Auto Industry in the world and EV sales are less than 1% of total auto sales. It means lot of potential is there to develop in EV segment.

Opportunities for EV segment:

  • Strict emission rules
  • Govt. support for charging infrastructure companies
  • Green transport initiative by Govt. and Private corps
  • Because of the recent developments, India became surplus in electricity and plenty of electricity is available
  • The electrical energy is clean and green energy and reduces air and sound pollution significantly
  • Reduces the fuel imports and saves foreign currency reserves
  • The electrical energy is very cheaper and saves the consumer pockets

Challenges Currently India Facing in EV segment:

  • EV Components manufacturing
  • Charging Infrastructure
  • Initial cost of electrical vehicles

3 Main Categories in Electrical Vehicle / EV Industry:

  1. Lithium Ion Battery Manufacturing companies
  2. Charging Infrastructure companies / EV Infrastructure companies
  3. Electric Vehicle Manufacturing companies
  • 2-Wheeler
  • 3 & 4-wheeler

9 Best Long Term Electrical Vehicle /EV Sector Stocks to Invest in India

1. Tata Chemicals

  • Key Ingredients production
  • Agro sciences, Nutritional sciences, Material sciences
  • Energy sciences: Lithium Ion battery
  • Unique ability to build Circular Economy around Lithium-ion technology
  • Company acquired land in Dholera, Gujarat, where the company plans to build an integrated business which includes cell manufacturing, battery recycling and battery production
  • currently it has technology tie-ups and R&D partnership in the lithium battery and the battery re-cycling businesses
  • Company has tie-ups with CSIR-CECRI, ISRO and C-MET to strengthen a lithium-based energy storage solution strategy.
  • The company is already in talks with a couple of auto majors to supply the batteries in 3-year time from now
  • Strong local distribution network and export of batteries from India
  • Good dividend history of last 5 years

2. Exide Industries

  • India's largest manufacturer of Batteries and energy storage solutions, planning to build Li-Ion battery manufacturing facility by launching new JV with Leclanche to power the growth of India's EV market
  • Manufacturing plan has been set up in Gujarat
  • Exide Industries and Sydney-based Ecoult are setting up a new Li-Ion battery manufacturing plant in East India named Ultra Battery
  • Company has low Debt-to-Equity ration at -0..25 times
  • Stock is technically in a Bullish range
  • High Institutional Holdings at 32.78%

3. Amara Raja Batteries:

  • India's second largest traditional battery maker, is ready to enter electrical car battery space.
  • Planning to build a Li-Ion assembly plant as it seeks to grab a slice of the market for electric power packs that are set to grow to $300 billion by 2030
  • The company is aiming to be a Rs. 10,000 crore entity in the next 2-3 years as the company clocks a solid double-digit growth
  • Working with IIT Chennai for Li battery technology

4. Tata Power:

  • Largest Integrated Power Value chain company
  • Commitment towards:
  • 60% green energy share by 2025
  • Carbon neutral company by 2050
  • EV Charging infrastructure
  • Already set up 170 charging points and expanding
  • Agreement to set up EV charging points at petrol and diesel pump

5. M&M:

  • Passenger vehicle segment market share is 7.1%
  • EV pioneer in India
  • R&D center in Bangalore to focus on EV manufacturing
  • Strategic alliance with foreign companies for technology and production methods

6. Tata Motors:

  • Passenger vehicle market share: 4.8%
  • 2nd company to enter EV market after M&M
  • major focus on EV business
  • The recent developments happening in Tata Power and Tata Chemicals in Electrical energy segment will be leveraged by Tata Motors
  • With a major focus area on electrical buses, it plans to be a producer of 4 lakh buses in near future
  • In the passenger segment, Tata Motors has 3 EV variant cars namely Tigor, Tiago, and Nano
  • EV Car sales:
    • In last 3 quarters, produced 1600 units
    • Expectation for next quarter: 1400 units

7. Minda Industries:

  • World's best performing Indian auto parts maker
  • Building expertise in Light-weight components
  • Increased the R&D costs to enter the EV segment
  • 62 manufacturing plants
  • Germany design centers in Taiwan, Japan & Spain

8. Maruti Suzuki:


  • India's largest Automobile company in 4-wheerler segment and one of the most trusted company by Indian car owners
  • Aggressive player in EV
  • Wide reach in Indian Markets
  • Wagon R electric vehicle in the second half of 2021

9. Hero Motocorp:

  • Largest 2 wheeler company in the world
  • 2nd largest EV 2-wheeler firm in India in FY20. It has already launched a range of path-breaking and innovative electric scooters.
  • Expecting to expand its reach to about 50 cities across country in 5 year and also world-wide.
  • In 2018, it opened its flagship product Ather 450 for pre-orders in Bengaluru and delivered the same during September. Now, it is targeting Chennai and will eventually take it up to 30 cities by end of FY2023.
  • A new manufacturing facility is expected to be set up to produce 1 million vehicles a year.
  • Also, having plans to set-up 6,500 charging points over the next 5 years which will boost the sales of EV
  • The aggressive plans of Ather would give a first mover advantage and indirectly benefit to Hero Motocorp

Conclusion:

On a nutshell, India's automotive market looks poised for the- Road to EV boom. At one place it has ‘Charging infrastructure’ and ‘Upfront cost’ as barriers to its progress. At the same time, it is armed with gleaming opportunities like ‘Public procurement’, ‘Strict Emission Norms’, and ‘Rs.10,000 crore FAME2 Scheme’. The Electrical Vehicle Industry is growing faster and you can surely vouch for its progress. 
All the above stocks are good for Long term investment. Systematic investment approach is most suggestible.

Disclaimer:

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.


This post first appeared on My Investments Pub, please read the originial post: here

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9 Best Long Term Electrical Vehicle /EV Sector Stocks to Invest Systematically in India

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