Motilal Oswal sees multiple growth levers ahead as premiumisation raises suspension content, while BS-VII, CAFE III, and TREM-V drive higher Clean Air content across passenger vehicles, CVs, and off-highway applications. Localisation of advanced technologies, new customer programs, and India's emergence as an export hub should further support market- and wallet-share gains. Motilal Oswal estimates a 19% earnings CAGR for the consolidated business (FY26-29).
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Motilal Oswal Report
According to Motilal Oswal, Tenneco Clean Air India Ltd. enters its next phase of growth from a position of strength, commanding ~58% share in CV Clean Air, ~68% in off-highway Clean Air (ex-tractors), ~20% in PV Clean Air, and ~55% in PV shock absorbers and struts.
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These leadership positions, backed by deep OEM relationships and Tenneco's global technology and research and development, create strong entry barriers.
The brokerage sees multiple growth levers ahead as premiumisation raises suspension content, while BS-VII, CAFE III, and TREM-V drive higher Clean Air content across PVs, CVs, and off-highway applications.
Localisation of advanced technologies, new customer programs, and India's emergence as an export hub should further support market- and wallet-share gains.
Motilal Oswal estimates a 19% earnings CAGR for the consolidated business (FY26-29).
With a capital-efficient model and strong balance sheet, Tenneco is well placed to pursue growth while sustaining healthy returns (order book stands at Rs 12,400 crore).
Its net cash position, negative working capital cycle, 90%+ core RoCE, and strong cash conversion (70%+ cash flow from operation/Ebitda; 80%+ free cash flow/PAT) provide resilience and support expansion into new segments.
At the current market price of Rs 448, the stock trades at 27.8x/23.2x FY28E/29E earnings per share.
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Motilal Oswal reiterates its Buy rating on the stock with a target price of Rs 673, based on 30 times Sep'28E earnings.
Key risks:
Faster EV adoption, termination of the technology license or PE exit overhang, intensifying competition, commodity fluctuations, and loss of key customers, are the key risks to the brokerage's call.
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