The key concern in Tata Motors CV business has been its gradual loss of market share across key segments. Particularly worrisome is the market share loss in light commercial vehicle goods from a high of 40% in FY22 to 27% now, and the gap with the current market leader M&M is rising with every passing year.
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Motilal Oswal Report
The industry’s pricing discipline has certainly been commendable over the last 12 months, with all commercial vehicle players witnessing improvement in margins. However, the key concern in Tata Motors CV business has been its gradual loss of market share across key segments.
Particularly worrisome is the market share loss in light commercial vehicle goods from a high of 40% in FY22 to 27% now, and the gap with the current market leader Mahindra and Mahindra is rising with every passing year.
Even in medium and heavy commercial vehicle goods, its market share has declined to 49% from 54% in FY22. In the MHCV bus segment, its market share has come down to 30.3% in H1 FY26 from 38% in FY22.
Further, its recent acquisition of Iveco would expose it to the ongoing global macro uncertainties, thereby driving a potential derating, if the demand environment does not improve anytime soon.
Given the lack of any visible triggers, we rate Tata Motors CV business at Neutral with a target price of Rs 341 per share – we value the core business at 11x Sep’27E EPS (in line with peers) and add Rs 12 per share for its stake in Tata Capital.
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