Is Tata Motors overvalued or undervalued?

Aug 12 2025 08:07 AM IST
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As of August 11, 2025, Tata Motors is considered an attractive investment due to its undervalued status, evidenced by a PE ratio of 11.13, an EV to EBIT of 8.24, and a strong ROCE of 27.93%, despite a year-to-date stock decline of -11.73%.
As of 11 August 2025, Tata Motors' valuation grade has moved from very attractive to attractive, indicating a shift in perception regarding its investment potential. The company is currently assessed as undervalued, supported by a PE ratio of 11.13, an EV to EBIT of 8.24, and a robust ROCE of 27.93%. In comparison to its peers, Tata Motors stands out with a significantly lower PE ratio than Mahindra & Mahindra at 28.84 and Maruti Suzuki at 27.21, both of which are also rated attractive.

Despite the recent decline in stock performance, with a year-to-date return of -11.73% compared to a positive 3.15% for the Sensex, Tata Motors remains an appealing investment option. The company's financial metrics, including a price to book value of 2.07 and an EV to sales ratio of 0.56, further reinforce its undervalued status in the current market landscape.
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