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Electric Vehicle (EV) Stocks - How to Pick EV Stocks in India

11 Mins 21 Dec 2022 0 COMMENT


What do we understand by the Electrical Vehicles (EV) segment in India. Obviously, the most visible name that would come to mind are companies like Tata Motors with their Tata Nexon or the two-wheeler companies with their e-scooters. However, these are just the most visible segments of the EV industry. In India EV stocks typically refers to the complete ecosystem of electrical vehicles. EV stocks in India do not still have an index with a long history to be able to assess their performance. We can broadly classify the EV ecosystem into 5 parts.

a)  Established front end players like Tata Motors and Hero Motocorp

b)  EV input players like Minda, Motherson Sumi and Tata Elxsi

c)  EV battery (lithium ion) manufacturers like Exide and Amara Raja

d)  Charging stations for EVs like IOCL, NTPC and Tata Power

e)  Diversifiers into EV space like Greaves Cotton and Himadri Chemicals

Why Invest in EV Stocks?

Investing in equities is about catching the right theme early and staying with it. Today, top EV stocks in India offer that kind of a theme. Of course, not all the EV players would be successful, but considering the urgency that the Indian government has accorded to reduce carbon footprint in India, EVs would be an obvious beneficiary. Here are some of the advantages investors can derive from investing in EV stocks in India.

a) The biggest manufacturing industry in India is automobiles. Incidentally, the overall automobile industry constitutes about 7.5% of GDP and nearly half of the total manufacturing GDP. That is why India is focussing on EV segment. Clearly, EV is not just a technology story, but more of an India story.

b)  In terms of valuations, the investment rationale is gravitating towards environmentally compliant technologies. Markets are willing to assign a higher P/E and even investors are willing to commit more money into EV stocks.

c)  India has come up with its production linked incentive (PLI) scheme to encourage domestic manufacture of EVs. Over the next few years, not only will the domestic demand for EVs grow exponentially, but India could also emerge as the hub for manufacturing EVs on behalf of global companies.

d) Indian markets offer a wide choice in EV space. It is not just the auto manufacturers. Investors have a wide choice ranging from auto manufacturers to component manufacturers and battery makers. Investors can also look at themes like software support for EVs, charging stations as well as companies diversifying into EVs in India.

EV Stocks in India

How to assess electrical vehicle stocks in India? There are no hard and fast rules, but one thing that can give a picture is the one year returns. That may be a tad simple, but if you pass the market test, that is a good starting point.



Stock Price


Market Cap

(Rs crore)

1 Year

Returns (%)

Tata Motors

₹ 423.35

₹ 1,40,606


TVS Motors

₹ 1,051.50

₹ 49,955


Hero Moto

₹ 2,672.65

₹ 53,408


Ashok Leyland

₹ 146.15

₹ 42,912


Exide Industries

₹ 181.75

₹ 15,449


Amara Raja Batteries

₹ 640.30

₹ 10,937


Minda Industries

₹ 204.80

₹ 4,896



₹ 72.70

₹ 1,01,744



₹ 169.00

₹ 1,63,874


Tata Power

₹ 222.00

₹ 70,937


Himadri Specialty

₹ 105.15

₹ 4,409


Greaves Cotton

₹ 148.15

₹ 3,431


Data Source: BSE

One year may be a short time to assess the performance of top EV stocks in India, but the trend appears to be favouring companies with a strong EV franchise. In the above table, the EV stocks have been spread across different facets of the EV ecosystem like auto manufacturers, auto components, charging infrastructure etc.

Factors to Consider Before Investing in EV Related Stocks in India

Here are some key parameters to consider before you invest in EV stocks in India.

a)  Like in other investments, even in buying EV stocks the decision has to be backed by research. Read up major broker reports, evaluate the trends in global markets and then take a call. Check out how EVs evolved in the US and Chinese markets and commit funds accordingly.

b)  Put a focus on cash flows. One thing Indian investors learnt from the digital adventures of the last one year is that companies with limited visibility on net profits and cash flows, tend to disappoint in the equity markets. Funding losses with capital can be a temporary adjustment phase, long a long-term strategy.

c)  Typically, as suggested earlier, the EV industry has few identifiable segments like EV cars, EV two-wheelers, batteries, charging infrastructure, EV components etc. The idea is to look for the top two leaders in each of these niche segments. At least, in the first 10 years, this industry will remain a “winner take it all” or a “winner take it most” business.

d)  Is the government support forthcoming for the particular niche that the company is into. Today, the Indian government supports EV manufacture, EV support systems, Lithium-ion batteries etc with incentives, tax breaks and subsidies. These will help to reduce the cost in the initial stages and give a boost to profits.

e) Are any of these EV companies M&A candidates, is a question you need to ask. This is more applicable for small and mid-sized EV companies. The larger companies still have the time and balance sheet to fund the growth. For smaller companies, they could be attractive for M&A, either because the ROE is salivating or because their niche positioning makes them attractive for M&A.

Performance Overview of 2022’s EV Stocks List

Here is a quick look at how the stocks in the EV space have performed at a fundamental level. For simplicity, will stick to the same set of EV stocks as identified above.











Net Profit


Tata Motors

₹ 278,000

₹ 13,267




TVS Motors

₹ 24,368

₹ 2,566

₹ 757



Hero Motocorp

₹ 29,551

₹ 3,384

₹ 2,317



Ashok Leyland

₹ 26,237

₹ 2,677

₹ (-359)



Exide Industries

₹ 12,789

₹ 1,369

₹ 4367



Amara Raja Batteries

₹ 8,697

₹ 996

₹ 513



Minda Industries

₹ 2,976

₹ 273

₹ 192




₹ 589,000

₹ 47,592

₹ 25,102




₹ 133,000

₹ 39,702

₹ 16,676



Tata Power

₹ 42,816

₹ 7,494

₹ 1,741



Himadri Specialty

₹ 2,791

₹ 158

₹ 41



Greaves Cotton

₹ 1,710

₹ 20

₹ (-35)




EV investing is still a nascent area and it is just about emerging in the Indian context. However, the opportunity is big and growth potential substantial. The idea is to look for the leaders in various niches and invest for the long run. Markets will do the rest.

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