The global brokerage firm Macquarie maintained ‘outperform’ 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.

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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 margin may move higher with easing commodities and operating leverage.

Tata Motors had announced its plans to launch a hatchback EV with a price tag below Rs 12.50 lakh.

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“Tata Motors will very shortly launch a more affordable electric car — in a segment lower than Tigor EV. The starting price of Tigor EV is Rs 12.5 lakh. The next car, which could be a hatchback, will be priced very competitively,” Shailesh Chandra, MD of Tata Motors PV Business Unit, had told CNBC-TV18.

Calling Tiago EV the "new mainstream intervention from the stable of Tata Motors," Chandra said, "As a leader, we are now pioneering the next phase of the EV market expansion, which will bring all the EV benefits of an exciting yet easy drive, silent cabin, low cost of ownership to a more accessible level.”

The shares of Tata Motors ended 1.3 percent higher at Rs 456.95 on the BSE on Tuesday.

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(Edited by : Shoma Bhattacharjee)