As Tata Motors takes EVs to small cars, what does it mean for the car stock?| Roadsleeper.com

“We believe that Tiago EV offers an attractive proposition that provides differentiated appeal of an EV at a reasonable price. Tata is also expanding its EV availability from ~85 to ~165 cities as it expects good acceptance of Tiago EV in tier-2/3 -cities.EVs now make up 8% of Tata’s India PV volumes, and we believe Tata has the potential to capture share as EV adoption increases, global brokerage Jefferies said, maintaining its buy rating on the auto stock with a target price of ₹540 per share.

The brokerage likes Tata’s EV strategy, which it believes should increase market share for the company as EV adoption increases in India, although capacity constraints could limit its overall PV volume in the near term. “Despite the near-term macro challenges for JLR, we continue to like Tata given a strong cyclical recovery in Indian trucks and solar cars, an improved franchise in Indian solar cars and a strong focus on EVs.”

Tata leads India’s EV market, aided by government subsidies and high import duties, and the company intends to expand its electric PV portfolio from 3 EVs currently to 10 by FY26. The Tiago EV is aimed at existing electric car customers looking for a smaller car with premium features.

“We maintain our constructive view on Tata Motors shares, led by expectations of volume pick-up in both standalone/JLR divisions, aggressive cost-cutting and deleveraging. We have a Buy rating on the stock with a target price of ₹530,” said another broker Emkay.

The company has been a leader in electric PV and has targeted 10 models by FY26. Given the company’s strong lead, there is a high probability that EV market share should be higher than ICE’s market share in the medium term, it added.

The views and recommendations above are those of individual analysts or brokerage firms, and not of Mint.