»Profit Hunter by Equitymaster

On This Day - 13 OCTOBER 2021
Could HDFC Bank be a Big EV Winner? The Answer Will Surprise You...

Star Wars.

I was quite taken aback by these words from a friend, who is a self-appointed advocate of this Hollywood franchise.

The reason? We were not discussing movies, but factories. More specifically, the brand new electric vehicle factories.

My friend, a journalist, has recently visited Ola Electric's gleaming new factory in Bengaluru.

And all she could relate the factory to was her favourite sci-fi movie series!

She was told that 5,000 robots are digitally integrated into Ola's AI-enabled mega-factory.

They optimise performance, productivity, and product quality.

Engineering major ABB's robots and automation solutions ensure remote digital connectivity at Ola's factory.

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The automation solutions are deployed in the factory's key manufacturing process lines, including its painting and welding line.

The ABB robots are deployed extensively for the battery and motor assembly lines.

My friend was so impressed with what she saw that she cannot wait to buy the stock of Ola when it debuts on the stock market. After all, the EV opportunity is associated with the early stage billionaires.

Tesla's Elon Musk is not the only one.

According to Bloomberg Billionaire Index, the EV industry has produced five of the 10 biggest wealth gainers in 2020.

  • Bin Li of NIO
  • He Xiaopeng of Xpeng
  • Li Xiang of Li Auto
  • and Wang Chuan-Fu of BYD

A staggering amount of wealth is being generated in record time.

But now, after playing out in the United States, Europe, and China, the EV megatrend is just beginning to play out in India.

The problem is that everyone is looking for the next Tesla.

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Investors take it for granted that India's Tesla could be one of the major auto stocks. While this may be the case a couple of years down the line, a gargantuan opportunity in a niche EV space is getting completely missed.

Consider these facts...

  • The number of electric vehicles sold in India could go up 15 times in the next decade.
  • Almost 80% of new passenger vehicles are financed in India.
  • EV financing in India is a Rs 3.7 trillion opportunity by 2030.

So, no matter whether it's Ola or any other EV brand that becomes popular, a handful of EV financers will have their hands full.

Being one of the biggest auto lenders in India, HDFC Bank has a lot going its way.

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The bank is already making plans to tap into this massive opportunity, without compromising on its credit appraisal skills.

And the bank's digital presence could help it enormously to integrate into the EV ecosystem.

My research on the EV ecosystem threw up several such hidden opportunities which are being completely ignored.

If you want to know all about this research, then I would like to invite you to join me at my upcoming special event on the 25th of October at sharp 5 pm.

And please don't invest a single rupee in EV stocks before studying what we are going to reveal at this event.

You can book your free seat by clicking here.

Warm regards,

Tanushree Banerjee
Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst)

PS: Equitymaster's secret research has uncovered a little-known way to play the massive 15x Profit opportunity in electric vehicles. Details here...

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