Home / Markets / Stock Markets /  As Tata Motors brings electric to small cars, what it means for the auto stock?

Tata Motors has launched the electric version of the Tiago. The range of the Tiago EV hatchback will be priced between 8.49 lakh- 11.79 lakh, ex-showroom. Tiago EV is Tata's third electric passenger vehicle (PV) and its first electric hatchback.

“We believe Tiago EV offers an attractive proposition, providing the 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 form 8% of Tata's India PV volumes, and we believe Tata has potential to gain share as EV adoption rises," said global brokerage Jefferies and has maintained its Buy rating on the auto stock with a target price of 540 per share.

The brokerage house likes Tata's EV strategy, which it believes should drive market share gains for the company as EV adoption rises in India, although capacity constraints might limit its total PV volume in the near term. “Notwithstanding the near-term macro challenges for JLR, we continue to like Tata given strong cyclical recovery in Indian trucks and PVs, an improved franchise in Indian PVs, and a strong EV focus."

Tata leads India's EV market, helped by government subsidies and high tariffs on imports and the company intends to expand its electric PV portfolio from 3 EVs at present to 10 by FY26. Tiago EV is targeting existing EV customers who are looking for a smaller car with premium features.

"We retain our constructive view on Tata Motors shares, led by expectations of volume upturn in both standalone/JLR divisions, aggressive cost savings, and debt reduction. We have a Buy rating on the stock with a target price of 530," said another brokerage Emkay.

The company has been the leader in E-PVs and has targeted 10 models by FY26. Considering the strong head-start for the company, there is a high probability that the EV market’s share should be higher than ICE’s market share over the medium term, it added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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