Tata Motors CV Valuations Attractive, Says Nomura After Initiating Coverage — Check Target Price
The brokerage firm noted how Tata Motors CV is well-positioned to benefit from this CV upcycle, projecting wholesale volumes for MHCVs to rise by approximately 10% in both FY26 and FY27.
Nomura has initiated coverage on Tata Motors Commercial Vehicles, labelling the company as key beneficiary of the expected upcycle of India's commercial vehicle industry while citing current valuations as attractive.
In its latest note on autos, Nomura has also highlighted how Tata Motors CV is a dominant market leader in the CV segment, with a commanding 45% share in the medium and heavy commercial vehicle (MHCV) and a 31% share in light commercial vehicles (LCV) for fiscal year 2025.
The brokerage firm noted how Tata Motors CV is well-positioned to benefit from this CV upcycle, projecting wholesale volumes for MHCVs to rise by approximately 10% in both FY26 and FY27.
"TMCV’s focus on profitable growth has resulted in consistent improvement in profitability for the company and the industry, in our view," Nomura wrote.
Nomura also forecasts Tata Motors CV's Ebitda margins to improve from 11.6% in FY25 to 13.6% in FY28. This improvement will be driven by operating leverage and pricing power, in the wake of the recent GST cuts.
Another key growth driver for Tata Motors CV is the planned acquisition of Italian OEM IVECO's commercial vehicle business for EUR 3.8 billion. The process is expected to be completed by April 2026 and is projected to make TMCV the fourth-largest truck maker globally by volume.
Nomura’s valuation is based on a Sum-of-the-Parts (SOTP) method, valuing the domestic business at 12x FY28F EV/Ebitda and the IVECO segment at 4x CY27E EV/EBIT. The brokerage believes the current valuations in TMCV are attractive.
Keeping these factors in mind, Nomura has assigned a 'buy' rating on Tata Motors CV with a target price of Rs 471, which implies 22% upside from Friday's closing price of Rs 394.
