Tata Motors or Ashok Leyland? Analyst reveals his preferred auto stock for near-term gains

Tata Motors passenger vehicle business may still be one of the strongest structural stories in India’s auto market, but a governance overhang at the Tata Group is keeping investors cautious in the near term, according to market expert Rachit Khandelwal, Head Research & Investor Education at B&K Securities, who contrasted that slower-burn outlook with a more bullish trading setup in Ashok Leyland Ltd.

Responding to a viewer query, Khandelwal said Tata Motors Passenger Vehicles Ltd remains a personal favourite because of its product pipeline and dominant position in electric vehicles. Yet he warned that sentiment around Tata Group stocks could remain subdued until leadership-related uncertainty clears.

EV strength meets governance drag
Rachit argued that Tata Motors continues to hold a commanding position in India’s EV market, saying it still controls “more than around fifty percent of the total EV bracket.” That leadership, combined with the company’s standing in the passenger vehicle race against Mahindra, keeps the broader growth thesis alive.

But he was equally clear that investors should not expect a sharp rerating immediately. “I don’t see anything happening in any of the Tata group stocks till the time this fiasco gets over and we get a clear picture as to who’s heading what,” he said, referring to uncertainty around board-level developments and the reappointment debate involving N. Chandrasekaran.

Why the call is to hold, not exit
Despite the caution, the analyst stopped short of turning negative on Tata Motors. His advice was to stay invested rather than sell into weakness, arguing that the market had already absorbed much of the headline risk. “If you’re holding it, just hold it,” he said, adding that, in technical terms, the impact of news tends to get discounted quickly in prices.

For investors watching levels, he said a move above 348 could open the door to 400 and eventually 440. However, he stressed that such gains would “seriously take some time” and are “not anytime soon,” reinforcing the idea that Tata Motors is currently more of a patience trade than a momentum bet.

Ashok Leyland emerges as the sharper near-term play
In contrast, Ashok Leyland was framed as a stock with stronger immediate upside potential after a recent correction. Rachit said the counter is “all geared up to go up again,” pegging 180 as a near-term target.

More importantly, he said a decisive breach and hold above 186 could trigger a sharper rally, with 224 possible “in this quarter itself.” That makes Ashok Leyland the more actionable call for traders seeking quicker returns, while Tata Motors remains a fundamentally attractive but sentiment-constrained auto story.