Tata Motors Stock Gains as Nomura Projects 14% Upside Despite May Sales Dip

Brokerage maintains neutral rating, expects EV growth to pick up with Harrier EV

After three consecutive sessions of losses, Tata Motors stock rose over 1% to ₹714 in morning trade on June 4, offering a breather for investors. The rally came despite an 8.6% year-on-year decline in the company’s May 2025 vehicle sales, which was primarily due to sluggish demand in the domestic market.

Nomura Maintains Neutral Rating, Sees Strong Upside

What fueled the recovery in the Tata Motors share price was a fresh report by global brokerage Nomura, which maintained its neutral rating on the stock but projected a target price of ₹799 per share.

This reflects a potential upside of nearly 13.5% from the last closing price of ₹704. Nomura’s optimism is driven largely by Tata Motors’ electric vehicle (EV) strategy, particularly the anticipated launch of the Harrier EV.

Harrier EV to Drive EV Penetration

According to Nomura, the Harrier EV is expected to significantly boost EV adoption in the high SUV segment. The vehicle is positioned competitively, with its pricing closely aligned with the entry-level diesel automatic SUVs, making it a compelling option for consumers considering the switch to electric.

The report highlighted that the Harrier EV’s placement puts it in direct competition with Mahindra & Mahindra’s BEV (Battery Electric Vehicle) offerings, indicating a new phase of rivalry in the Indian electric SUV space.

Rising EV Penetration Forecast

Nomura forecasts that EV penetration in Tata Motors’ portfolio will grow steadily, increasing from 2.3% in FY25 to 4% in FY26 and 5% in FY27. This projection showcases the firm’s belief in the brand’s ability to scale up EV volumes through strategic launches and better market positioning.

Investor Sentiment Gets a Boost

Despite the recent dip in monthly vehicle sales, the positive outlook on Tata Motors shares by a major global brokerage has helped restore investor confidence. The stock’s rise on June 4 reflects growing anticipation that future growth could be led by its EV ambitions.

Tata Motors remains one of India’s leading EV players, and with the upcoming Harrier EV launch, the company aims to further strengthen its position in the rapidly evolving automobile market.