Tata Motors recently announced the commercial launch of compact sedan Zest, with a start price of Rs. 4.64 Lakhs, ex-showroom, New Delhi, for the petrol Revotron 1.2T model and Rs. 5.64 Lakhs, ex-showroom, New Delhi, as the start price for the diesel variant. 

Commenting on the Zest, Prabhudas Lilladher (PL) said, "We test drove both the petrol as well as the diesel variant of Tata Motors’ newly launched Zest sedan. We were positively surprised with the kind of features offered, coupled with the driving comfort. In our view, this is Tata Motors best car till date."

However, on the flipside, mileage falls short of the competition in this segment. At the same time, given the perception issues associated with Tata Motors' brand in the car market, it might take some time before the company starts getting huge volumes from this product, the stock broker opined.

Prabhudas Lilladher believes Zest could add around 5,000-6,000 units/month and would provide the much needed fillip to its passenger car volumes. "However, our SOTP valuation does not change much as we have increased our volume estimates by only 2,000 units/ month in the passenger car segment."

Prabhudas Lilladher has maintained 'Accumulate' on Tata Motors with target price of Rs 552 a share.

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