The Indian automotive industry is on the cusp of a massive change, spurred by the sudden uptake of electric vehicles (EVs) and changing consumer demands. The sector is seeing an upsurge in EV take-up, with new models being introduced by companies and the government providing incentives for cleaner transport, a recent report said.
In spite of these developments, the auto industry has not been doing well in recent times. The S&P BSE Auto Index lost about 5.4% year-to-date as of March 21, 2025, capturing the struggles of auto stocks.
This decline offers a possible opportunity to investors since current valuations can provide good points of entry into the sector.
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In this backdrop, it’s wise to look at the five cheapest auto stocks in India. To determine those stocks, we’ve concentrated on firms with a market cap of more than Rs 500 crore and a positive EV/EBITDA multiple.
The EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization) ratio is an important tool in analyzing a company’s valuation. It is the comparison of the value of the company, including debt, with its earnings from operations, which gives an idea of its health and profitability.
Let’s have a glance on cheapest five stocks in India.
#1 Tata Motors
Tata Motors Group is a major global auto manufacturing company. As part of the prestigious multi-national conglomerate, the Tata group, it produces a large and varied range of cars, sports utility vehicles, trucks, buses and defence vehicles for the globe.
It has India, the UK, South Korea, South Africa, China, Brazil, Austria and Slovakia operations via a robust global network of subsidiaries, associate companies and Joint Ventures (JVs), including Jaguar Land Rover in the UK and Tata Daewoo in South Korea.
The current valuation of Tata Motors stands at an EV/EBITDA multiple of 5.2x, which reflects comparatively favorable pricing versus peers. It is currently trading almost at par with its 10-year median EV/EBITDA of 5.5x.This implies that the stock could be undervalued.
Over the last one year, its share price has tumbled 28.3%.
Tata Motors Share Price Performance in 2025
Source: Screener.in
Tata Motors has been upgraded to a BUY rating from ADD by ICICI Securities with a target price of Rs 831 per share,
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