Tata Motors Surges 5% As Brokerages See Up To 27% Upside

Shares of Tata Motors (CV), the demerged commercial vehicle business of the Tata Group, climbed nearly 5% in morning trade on Wednesday after multiple brokerages reiterated their positive outlook on the stock, citing strong industry demand, market-share gains and sustained profitability.

The stock rose as much as 4.85% to ₹420.55 during the session. Since its listing in November 2025 following the demerger of Tata Motors' commercial and passenger vehicle businesses, the stock has gained nearly 59% from its pre-listing price discovery level of ₹260 per share.

The rally came after leading brokerages maintained bullish views on the company and highlighted significant upside potential from current levels.

CLSA retained its 'Outperform' rating on the stock with a target price of ₹527 per share, implying an upside of more than 27% from current levels. The brokerage expects domestic commercial vehicle industry volumes to grow in the high-single digits during FY27, supported by freight demand, fleet expansion and improving economic activity.

The brokerage also increased its market-share target for Tata Motors' commercial vehicle business to 40% from 36% earlier. It expects the company to maintain double-digit EBITDA margins across industry cycles while benefiting from the growth of non-cyclical businesses.

Brokerages Back Growth And Margin Outlook

According to CLSA, non-cyclical businesses could grow 1.5 times faster than Tata Motors' core commercial vehicle operations, helping reduce earnings volatility over time. The brokerage expects the company to generate return on capital employed (RoCE) of 30-35% and free cash flow equivalent to 7-9% of revenue.

HSBC also maintained a positive stance on the stock with a 'Buy' rating and a target price of ₹490 per share.

The brokerage said commercial vehicle demand remains strong in the near term, particularly in the medium and heavy commercial vehicle (M&HCV) segment. It also noted early signs of recovery in the light commercial vehicle (LCV) market, which had faced prolonged weakness in recent years.

Nomura retained a 'Neutral' rating with a target price of ₹402 per share. While the brokerage's target remains below current market levels, it acknowledged the company's improving operational performance and management's focus on market-share gains and profitability.

Nomura highlighted management's target of achieving a 40% market share by FY28 and its commitment to sustaining double-digit EBITDA margins through industry cycles. The brokerage also noted the company's ambition to expand its connected vehicle ecosystem to 3 million vehicles by FY30.

Iveco Acquisition

Brokerages also pointed to the proposed acquisition of Iveco as a potential long-term growth driver for the company.

CLSA expects the transaction to be completed during the second quarter of FY27 and believes the acquisition could strengthen Tata Motors' global commercial vehicle presence. Analysts expect the deal to create sourcing efficiencies, improve product capabilities and support international expansion.

Nomura also highlighted potential strategic benefits from the acquisition, particularly in strengthening overseas operations and enhancing the company's technology and manufacturing capabilities.

The stock has attracted strong investor interest since its standalone listing in November 2025 after the separation of Tata Motors' commercial and passenger vehicle businesses. While Tata Motors (CV) now houses the group's commercial vehicle operations, the passenger vehicle business continues to trade separately as Tata Motors Passenger Vehicles.

Analysts believe the demerger has helped investors assign clearer valuations to the two businesses, while allowing management teams to focus on their respective growth strategies independently.