Here is why brokerage firms think M&M and Tata Motors will lead the EV play

Mahindra was his "dark horse" choice in the auto sector. Over the next couple of years, Bhatia expects Tata Motors and Mahindra to dominate the EV market.

The carmaker recently announced that it is developing new products and making investments in the EV sector. Mahindra and Mahindra said it will launch five new electric SUVs for both domestic and international markets. The first four SUVs are expected to arrive in the market between 2024 and 2026.

The company also launched its first electric SUV, XUV400 on the eve of World EV Day.

Global brokerage firm CLSA has maintained a ‘buy’ call on the shares of Mahindra and Mahindra with a reverse target price of Rs 1,567 from Rs 1,498 earlier. According to the brokerage firm, the design philosophy of the InGlo platform can make EV models from M&M have class-leading features like in the XUV400.

Brokerage firm Nomura mentioned in its latest report that the SUV segment should be the most attractive for EV launches. Given the bigger size, Nomura expects M&M’s e-XUV400 to have a 40KWH battery size and starting price of Rs 18 lakh, similar to the Nexon EV Max. The company may consider a smaller battery size variant as well. The brokerage has a buy rating on the stock with a target price of Rs 1,505.

Macquarie has an ‘outperform’ rating on the shares of Tata Motors with a target price of Rs 503. The brokerage house sees a strong demand outlook for India's private vehicle and commercial vehicle segment.

Macquarie considers Tata Motors' Tiago EV — the EV version of the smallest car in its portfolio — as an attractive opportunity in the entry-level segment. As per Macquarie, the auto major's stock might see a 12 percent upside. The brokerage house says that the margin may move higher with easing commodities and operating leverage.