Shares of Tata Motors Commercial Vehicle Ltd. will be in focus heading into trade on Wednesday after the stock received initiation from UBS. The brokerage firm has initiated coverage with a ‘buy’ call on the counter, citing a strong India business and an impending ‘resurgence’.
UBS believes Tata Motors CV is unfettered and accelerating, backed by a strong domestic business that has shown promising signs. Keeping that in mind, the firm has issued a ‘buy’ call with a price target of Rs 550, which implies an upside of roughly 24% from Tuesday’s closing price of Rs 444.
The demerged Tata Motors CV could benefit from improving trucking volumes in Europe, which in turn could support margin expansion and bolster the company’s cash flow.
UBS adds that the commercial vehicle space is a more favourable space than the passenger vehicle or the two-wheeler space. Tata Motors, to that end, has emerged as a strong buy for the brokerage firm.
