EV plays all charged up- The top EV stocks to watch for 2024

EV plays all charged up: The top EV stocks to watch for 2024

The surge in electric vehicle (EV) adoption in India is reaching new heights, fueled by government initiatives and a growing emphasis on reducing emissions to achieve the net-zero target. According to the government’s Vahan dashboard, 1.4 million EVs have been registered in the current calendar year, marking a substantial 37% increase compared to 2022.

This acceleration has also spurred investor interest in EV stocks, with thousands pouring funds into companies positioned for significant growth. Despite recent controversies surrounding the FAME subsidy, the EV sector is witnessing a paradigm shift, presenting both challenges and opportunities.

TVS Motor is gearing up to dispatch over 200,000 scooters based on its EV platform in the fiscal year 2024. The imminent launch of the iQube is expected to contribute substantially to the company’s profitability, and its global ambitions are evident through recent partnerships, including one with Emil Frey Group for a strategic entry into European markets.

In terms of stock performance, TVS Motor shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 7.45% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 51.90%, indicating a strong upward trend.

Year-to-date, TVS Motor shares have surged by 82%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 92% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.

Exide Industries

Exide Industries, a key player in lead-acid batteries and storage solutions, has exhibited robust growth, rebounding from a mid-June 2022 low of ₹136 to its current trading value of ₹291, delivering a remarkable 54.8% return in the past year.

The company is strategically positioned to meet the rising demand in the EV sector by investing ₹60 billion in a phased manner to establish a 12 GWh Li-Ion cell plant. Despite margin challenges in FY23, Exide Industries remains well-positioned to capitalize on growing demand in the automotive industry, particularly in the OEM and aftermarket segments.

Exide Industries shares have delivered positive returns across various time frames. Over the last month, the stock has shown a positive return of 4%, indicating short-term growth. In the last six months, the performance has been even more impressive, with a substantial increase of 26.19%, showcasing the stock’s resilience and upward momentum.

Year-to-date, Exide Industries shares have surged by 61.77%, emphasizing the stock’s positive trajectory in the current calendar year. Looking back over the last twelve months, the stock has demonstrated significant growth, surpassing 62%. These consistent positive returns underscore the stock’s strong performance and appeal to investors.

Rajratan Global Wire

Rajratan Global Wire, the world’s largest bead wire manufacturer, plays a pivotal role in enhancing the performance of nearly 50% of vehicles on the road. As the sole producer of bead wires in Thailand, the company serves industry giants such as Apollo Tyres, Bridgestone, and Michelin. Strategic investments in a new plant in Chennai and active client acquisition endeavors position Rajratan Global Wire as a frontrunner in the global tyre wire manufacturing domain.

In terms of stock performance, Rajratan Global Wire faced a mixed bag of results. In the last month, the stock tried to secure positive returns at 3.77%, showcasing a modest upward movement. Contrastingly, the past six months were challenging, with the stock experiencing negative returns of 8.46%, indicating a period of decline.

Year-to-date figures continued in negative territory, depicting a decline of -12.95%. However, over the last twelve months, the stock managed to maintain positive returns of 7.86%, highlighting its resilience in the longer term.

Bajaj Auto

Bajaj Auto emerges as a formidable player in the 2 and 3-wheeler EV segment, with the re-introduced electric scooter, Chetak, witnessing an extraordinary surge in domestic sales. The company is expanding its distribution network, investing in capacity expansion.

Earmarking over ₹7.5 billion for FY2024. With a robust financial performance, including a 5-year CAGR of 7.4% and 7.5% for revenue and net profit, Bajaj Auto remains well-positioned to capitalize on the flourishing EV market.

The shares of Bajaj Auto have demonstrated positive returns across various time intervals. In the last month, the stock delivered a positive return of 6.61%. Over the past six months, it exhibited strong momentum with returns of 38.80%, indicating a robust performance.

Year-to-date figures further emphasized the stock’s bullish trend, recording an impressive growth of 78.92%. Looking at the broader horizon, the shares have shown consistent strength, given returns of over 80% in the last year.

Fiem Industries

Fiem Industries positions itself at the forefront of the EV revolution, deriving over 90% of its revenue from the 2-wheeler segment. Renowned for introducing LED lights to 2-wheelers, the company relies on in-house R&D and supplies crucial components to major players in the EV space, including Ola Electric and Hero Electric. With collaborations with new customers in the EV segment, Fiem Industries is strategically expanding its product portfolio and customer base.

When discussing the stock performance, the shares of Fiem Industries have consistently delivered positive returns over various timeframes. In the last month, the stock sustained its positive momentum, giving returns of 1.23%.

Over the past six months, it exhibited notable growth with returns of 17.92%, showcasing a robust performance. Year-to-date figures further emphasize the stock’s bullish trend, recording a steady growth of 18.10%. Looking at the broader horizon, the shares have maintained their positive trajectory, showing returns of 17.49% in the last year.

Pricol

Pricol, a global leader in the automotive sector, stands as the world’s second-largest producer of driver information systems for two-wheelers. With a proactive approach in the EV space, Pricol collaborates with startups and is the sole supplier to TVS iQUBE.

An international licensing agreement with BMS PowerSafe positions Pricol to manufacture and sell Battery Management Systems (BMS) for the Indian market. Despite past financial challenges, the company’s recent performance indicates a commitment to financial stability and a strong position in the evolving EV landscape.

When assessing the stock performance, Pricol stands out with impressive returns. In the last one month, the shares delivered a positive return of 10.92%, maintaining resilience. Over the past six months, the stock exhibited strong performance, recording substantial returns of 62.98%.

The year-to-date trajectory remained positive, showcasing an 96.32% increase in value. Looking at the broader picture, the stock’s robust performance over the last year is evident, with returns exceeding 103.87%. Investors are likely to be pleased with Pricol’s consistent upward trend and favorable returns.

Tata Motors

Tata Motors, a leading Indian car manufacturer currently holding a dominant 70% share in the country’s electric passenger vehicle market, anticipates a significant surge in electric vehicle (EV) sales in India. The company projects a growth rate of 30-40% in EV sales for the calendar year 2024, following a nearly doubled market size in 2023.

In the ongoing year, the overall passenger vehicle market is forecasted to reach a total sales figure of 4.1 million units, reflecting a growth rate of 7-8% compared to 2022. Notably, the EV segment is expected to experience an even more substantial growth, reaching approximately 90-100,000 units, a marked increase from the approximately 50,000 units sold in the previous year.

The shares of Tata Motors have demonstrated positive returns across various time intervals. In the last month, the stock delivered a positive return of 3.94%. Over the past six months, it exhibited strong momentum with returns of 27.67%, indicating a robust performance.

Year-to-date figures further emphasized the stock’s bullish trend, recording an impressive growth of 83.64%. Looking at the broader horizon, the shares have shown consistent strength, given returns of over 88.41% in the last year.

IOCL, BPCL and HPCL

In a bid to promote the widespread adoption of electric vehicles (EVs), the government has been actively encouraging state-owned oil companies to establish a robust network of charging stations. This initiative aims to alleviate concerns related to the range of EVs and facilitate a seamless experience for electric vehicle drivers. The government views the increased adoption of EVs as a pivotal measure to reduce the reliance on expensive fuel imports and address environmental pollution.

The government has mandated that all petrol pumps established after 2019 must incorporate one alternative energy source alongside traditional petrol and diesel. The alternate fuel options include CNG, biogas, or EV charging facilities. Collaboratively, Indian Oil, HPCL, and BPCL are working towards establishing charging facilities at 22,000 pumps, with approximately 40% progress achieved thus far. These EV charging stations are strategically being deployed in both urban centers and along highways.

BPCL has taken a significant step in this direction by introducing over 90 EV fast-charging highway corridors across the country. These fast-charging stations are strategically positioned approximately every 100 km on both sides of highways, covering a cumulative distance of more than 30,000 km. Notably, the initial three EV fast-charging corridors set up by BPCL include routes connecting Chennai-Trichy-Madurai, Chennai-Bengaluru, and Bengaluru-Coorg.

What do analysts expect from the sector ?

“Exide Industries will be an interesting one. Their 6GW lithium cell manufacturing capacity, that is expected to commence production by the end of FY25 will give them a first mover advantage. Given India will have a demand of 150-200 GW, the order book is expected to be robust once they commence production. Any delay or innovation of a new type of battery chemistry would give the company some challenges,” says Sreeram Ramdas, Vice President at Green Portfolio.

Ramdas also says that the IPO sentiments towards Ola Electric will be interesting. The company clocked INR 1,472 Crores in losses during FY23 all the while when their sales grew by 7x. Given the aggressive growth strategy the company has implemented, the debt on the books have swelled to more than INR 1,700 Crores, and considering the interest rate, depending on the loan for them, is between 9-11%, it will be interesting to watch how the market responds to the dim trajectory towards profitability.