Tata Motors’ financial trajectory has shown resilience, particularly in the passenger vehicle (PV) and commercial vehicle (CV) segments. Despite a 5% decline in CV volumes from FY19 to FY25, the company achieved a 6% CAGR in India CV revenue and a 7% CAGR in EBITDA, supported by a higher gross vehicle weight (GVW) mix and non-core revenue streams. The consolidated market capitalization stands at approximately ₹1.32 trillion as of December 2025, with the stock trading near ₹360 on the NSE, reflecting a potential upside of around 19% from recent levels as per Ambit Capital’s target price of ₹430. Tata Motors’ trailing twelve months (TTM) earnings per share (EPS) surged 181.8% YoY to ₹255.31, while the price-to-earnings (P/E) ratio remains attractively low at 1.35, significantly below the sector average of 26.31, indicating undervaluation relative to peers. The company’s return on equity (ROE) at 23.96% for FY25 outperforms its 5-year average of 10.62%, showcasing improved capital efficiency. Tata Motors also maintains a dividend yield of 1.74%, providing modest income to shareholders.

Tata Motors has aggressively expanded its electric vehicle portfolio to capitalize on India's accelerating EV adoption, supported by government subsidies under the FAME-II scheme and tightening emission norms. The company’s EV models such as the Tata Nexon EV, Tigor EV, and the recently launched premium EVs are witnessing strong consumer traction, contributing to a growing share of total PV sales. Tata Motors’ investment in EV technology includes enhancing battery efficiency, cost optimization, and expanding charging infrastructure partnerships, which are critical for long-term competitive advantage. The company is targeting a 15-20% CAGR in EV sales volume over the next three years, supported by new model launches planned for 2026 and 2027, including electric SUVs and commercial electric vehicles. This strategic focus on EVs aligns with India’s ambition to achieve 30% electric vehicle penetration by 2030, positioning Tata Motors as a market leader in sustainable mobility.

Tata Motors’ global expansion strategy focuses on leveraging its cost-competitive manufacturing base and technological capabilities to penetrate emerging and developed markets. The company's commercial vehicle arm, Tata Motors CV (TMCV), has shown significant progress, with EBITDA growing at a 7% CAGR between FY19 and FY25 despite volume declines. The demerger of the CV business has unlocked focused management attention and operational efficiencies. Tata Motors is expanding its footprint in Europe and Africa through strategic partnerships and local assembly units, including collaboration with Iveco for medium and heavy commercial vehicles. The global expansion is complemented by a focus on higher tonnage and premium product mix, supporting average selling price (ASP) growth and margin expansion. Analysts expect TMCV revenue and EBITDA to grow at 6% and 7% CAGR, respectively, over FY25-28, with a target price of ₹430 for the CV business stock on NSE.

For retail investors and financial professionals, Tata Motors presents an attractive growth opportunity fueled by its strategic EV launches and global commercial vehicle expansion. The company’s undervaluation relative to peers, improving profitability, and strong free cash flow generation support a positive investment thesis. A buy-on-dips strategy with a target price near ₹430 (approximately 19% upside from current levels) is recommended for investors with a medium to long-term horizon. However, risks include cyclical demand fluctuations in the auto sector, raw material price volatility impacting margins, regulatory changes, and competitive pressures from domestic and international EV players. Investors should monitor quarterly earnings, volume trends, and policy updates closely. Diversification within the Tata Group’s auto portfolio (including Jaguar Land Rover) may also mitigate risks. Regular portfolio review and risk management measures are prudent given sector cyclicality.