Tata Motors Ltd, the demerged commercial vehicles arm of the Tata group, climbed nearly 4% in morning trade on June 24, with several brokerages reaffirming their constructive view on the stock.
The rally was driven by expectations of robust sector demand, gains in market share and scope for further margin improvement. The counter touched Rs 414.40, up 3.6% during the session, and has risen close to 59% since its market debut in November 2025, when shares were discovered at Rs 260 in pre-listing trade.
CLSA lifts market-share estimate to 40%
CLSA kept its “Outperform” call on the stock, setting a target of Rs 527, which points to upside of over 27% from current levels. The brokerage projects domestic commercial vehicle volumes to expand in the high single digits during FY27, helped by rising freight activity and fleet additions.
It also revised its market-share projection for the company’s CV business upward to 40%, from 36% previously, while expecting double-digit EBITDA margins to hold through the cycle.
CLSA noted that the company’s non-cyclical segments could expand at 1.5 times the pace of its core business, a trend it believes would smooth out earnings swings. The brokerage pegs return on capital employed at 30-35% and free cash flow at 7-9% of revenue.
HSBC and Nomura stay constructive
HSBC retained its “Buy” rating with a target of Rs 490, pointing to sustained demand in the medium and heavy commercial vehicle segment. It added that the light commercial vehicle category appears to have bottomed out and is now showing early signs of a turnaround.
Nomura kept a “Neutral” stance with a target of Rs 402, acknowledging steady improvement in the company’s fundamentals. It said management continues to prioritise market-share gains and margin discipline, reiterating the FY28 target of a 40% market share.
The brokerage also flagged management’s confidence in sustaining double-digit EBITDA margins, a 30-35% RoCE, and 7-9% free cash flow margins, alongside a goal of 3 million connected vehicles by FY30.
Brokerages also flagged the proposed Iveco acquisition as a potential driver of long-term growth. CLSA expects the deal to close in the second quarter of FY27, while Nomura said it could yield sourcing advantages and aid the company’s international expansion plans.
The stock began trading in November 2025 after Tata Motors split into separate commercial and passenger vehicle entities, with the latter now listed independently as Tata Motors Passenger Vehicles Ltd.
