Tata Motors shares rallied 6% in early trade on Thursday after its commercial vehicles division posted a strong performance for the June quarter. The stock emerged as one of the top gainers among Nifty 100 companies as investors reacted positively to better-than-expected earnings and optimistic brokerage views.
The Tata Motors commercial vehicle stock traded at Rs 484.6, extending its gains after rising in the previous session ahead of the quarterly results. The shares have gained around 6.8% so far this year, outperforming the broader market, while the company’s market capitalisation crossed Rs 1.68 lakh crore.
Future outlook
Brokerages maintained a positive outlook on Tata Motors’ commercial vehicle business, highlighting strong demand conditions, price increases and expectations of margin expansion.
According to a report by Moneycontrol, Nomura upgraded the stock to a ‘Buy’ rating with a target price of Rs 554 per share. The brokerage said the company’s first-quarter EBITDA exceeded expectations, supported by growth across business segments.
It expects medium and heavy commercial vehicle demand to grow 8% year-on-year in FY27, compared with its earlier estimate of 5%.
Nomura also pointed to increasing electric vehicle adoption, with EV penetration reaching 10% in the small commercial vehicle segment. The brokerage said a 25% price increase implemented in July could support margins amid rising costs and supply challenges. It also highlighted export opportunities and the expected completion of the Iveco deal.
CLSA retained its ‘Outperform’ rating with a target price of Rs 596 per share.
Strong quarterly performance
Tata Motors Commercial Vehicles reported an 83% year-on-year increase in consolidated net profit at Rs 2,560 crore for the quarter ended June 30. Revenue from operations increased 19.3% to Rs 20,667 crore, while EBITDA rose 8.6% to Rs 2,640 crore.
The company’s EBITDA margin improved to 15.83% from 11.98% in the same quarter last year, driven by demand from infrastructure, logistics and freight sectors.
Analysts expect Tata Motors’ commercial vehicle business to benefit from continued demand growth, pricing actions, cost-control measures and expansion in electric mobility. The positive outlook has strengthened investor confidence in the stock’s future performance.
