Tata Group stock to buy now for an upside of 24%; Do you own it?

Synopsis: Tata Motors CV shares are in focus as the UBS Sees 24% Upside potential as it expects India’s commercial vehicles (CV) industry to outperform the passenger car and two-wheeler segments and believes Tata Motors’ CV business is well positioned to capitalise on this upcycle.

The shares of the Large-Cap company, specializing exclusively in the commercial vehicle (CV) business, including trucks, buses, and fleet solutions, are in focus after leading Global Brokerage firm UBS initiated a Buy Target with an upside potential of 24 percent.

With a market capitalization of Rs. 1,69,442.48 Crores on Wednesday, the shares of Tata Motors Ltd rose upto 4 percent, reaching a high of Rs. 460.65 compared to its previous closing price of Rs. 442.70.

News

Tata Motors Ltd is in focus after global brokerage firm UBS expressed a positive outlook on commercial vehicle manufacturers. UBS has initiated coverage on Tata Motors Ltd and has also raised the target price for Ashok Leyland Ltd.

UBS has initiated a “buy” rating on Tata Motors CV, setting a price target of Rs. 550 per share, which suggests a potential upside of upto 23 percent from its previous closing price.

Rationale for Tata Motors CV

UBS expects India’s commercial vehicles (CV) industry to outperform the passenger car and two-wheeler segments over the next two to three years, particularly in terms of profitability and free cash flow. 

It believes Tata Motors’ CV business is well positioned to capitalise on this upcycle, with strong cash generation enabling higher reinvestment and a potential recovery in market share. The recent demerger is seen as a key enabler, freeing up capital and sharpening strategic focus.

Tata Motors’ demerger came into effect on October 1, 2025, following approvals from the National Company Law Tribunal’s Mumbai Bench through orders dated August 25 and September 10, 2025. The appointed date for the scheme was July 1, 2025.

As part of the restructuring, Tata Motors’ commercial vehicles business was demerged into TMLCV, while Tata Motors Passenger Vehicles Ltd. was amalgamated with Tata Motors Ltd. Post-demerger, Tata Motors Ltd. remains a listed entity housing the commercial vehicles business, while the passenger vehicles business, comprising electric vehicles and Jaguar Land Rover, operates as a separate listed entity under Tata Motors Passenger Vehicles Ltd.

UBS Views on commercial vehicle sector

UBS says investors may be underestimating the structural strengths of the commercial vehicle sector versus two-wheelers and passenger cars. Globally, commercial vehicle stocks enjoy premium valuations due to industry consolidation, strong cash flows, and lower technological and regulatory risks, factors that are also present in India.

Despite this, Indian commercial vehicle stocks still trade at a discount, mainly due to earlier concerns around volatile volumes and margins. UBS notes that since FY24, the sector has shown more stable volumes, improved margins, and lower volatility, which should help close the valuation gap with more disruption-prone segments.

Following the 2025 demerger, Tata Motors Ltd (TML) specializes exclusively in the commercial vehicle (CV) business, including trucks, buses, and fleet solutions, along with related investments such as its stake in Tata Capital. The passenger vehicle and Jaguar Land Rover (JLR) operations were separated into a distinct entity, Tata Motors Passenger Vehicles Ltd.

The Commercial Vehicles Unit, now known as Tata Motors Ltd (TML), focuses on the production of commercial vehicles such as heavy trucks, buses, and pickups, following its renaming from TML Commercial Vehicles Ltd on October 29, 2025.

Meanwhile, the Passenger Vehicles Unit operates as a separate and independent entity called Tata Motors Passenger Vehicles Ltd (TMPV), which brings together passenger vehicles, electric vehicles (EVs), and the Jaguar Land Rover (JLR) business under one umbrella. The CV unit is listed separately, with shareholders receiving a 1:1 split, meaning one share of the new CV entity for every one Tata Motors share held.

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