Morgan Stanley upgraded Tata Motors to 'overweight' from 'equalweight', citing more stability in the China market, the prospect for improved profitability in India, and a "strong" pipeline for unit Jaguar Land Rover, among other factors.
The upgrade came as the investment bank raised its view on India's medium and heavy commercial vehicles (MHCV) sector to 'attractive', saying the segment cycle should hit a trough in the next six months.
Morgan Stanley predicts that MHCV volumes will recover over fiscal 2014 and 2015 as part of a recovery in industrial activity.
Morgan Stanley also upgraded Ashok Leyland to 'overweight' from 'underweight' calling the bus and truck maker "a good proxy to play the eventual industrial recovery".
Copyright Thomson Reuters 2012
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