Is Tata Motors overvalued or undervalued?

As of 7 August 2025, Tata Motors has moved from an attractive to a very attractive valuation grade. The company is currently undervalued, with a PE ratio of 10.28, an EV to EBITDA ratio of 4.23, and a ROCE of 28.37%. In comparison, its peers such as Mahindra & Mahindra have a significantly higher PE ratio of 29.08, while Maruti Suzuki stands at 27.3, indicating that Tata Motors is trading at a substantial discount relative to its competitors.
Despite recent stock performance showing a decline of 12.58% year-to-date against a Sensex return of 3.18%, the underlying valuation metrics suggest that Tata Motors presents a compelling investment opportunity. With its low EV to Sales ratio of 0.55 and a PEG ratio of 0.00, the company demonstrates strong potential for growth at a reasonable price, reinforcing the assessment of it being undervalued in the current market.