The Tata Motors CV (TMCV) share price came under pressure on Friday, opening almost 3 per cent lower before recovering a bit to trade about 1 per cent down at Rs 317. The weakness comes amid mixed signals from brokerages: while Nomura highlights steady margins and improving demand post-GST cuts, firms such as Nuvama and Motilal Oswal remain cautious on subdued medium and heavy CV growth and continued market-share losses across key segments, keeping ratings muted.
Nomura on TMCV
The brokerage said the CV business delivered revenue of Rs 18,040 crore in the September quarter, rising from Rs 17,277 crore. EBITDA margin stood at 12.2 per cent, up from 10.7 per cent. It added that free cash flow for the quarter was Rs 2,211 crore, taking first-half FCF to Rs 417 crore.
Nomura’s report said demand improved through the quarter, supported by strong monsoons and sentiment recovery after the GST rate cut, which TMCV passed on fully to customers. Management expects single-digit volume growth in the second half of the year, “supported by sustained utilisation and freight momentum.”
Nomura’s view on the broader industry remains cautious: domestic MHCV growth is estimated at 3 per cent, 5 per cent, and 5 per cent over FY26, FY27 and FY28. The brokerage said the CV business is on track to maintain double-digit margins but the growth profile remains modest, which explains why its rating stays unchanged.
Nuvama on TMCV: ‘Reduce’
Nuvama maintained its Reduce rating with a target price of Rs 300, compared with an earlier implied valuation of around Rs 280. This is the only disclosed rating and target for the demerged entity in the report. The brokerage did not provide a historical timeline before the demerger.
Nuvama said standalone revenue rose to Rs 16,861 crore from Rs 15,518 crore, while EBITDA increased to Rs 2,077 crore from Rs 1,641 crore. EBITDA margin expanded to 12.3 per cent from 10.6 per cent. Volumes grew 12 per cent to 94,681 units but realisations declined to Rs 17.8 lakh per vehicle from Rs 18.4 lakh because of an adverse mix.
Despite the operational stability, the brokerage expects a slow growth phase. It projected only a 1 per cent CAGR in domestic MHCV volumes between FY25 and FY28, compared with a 20 per cent CAGR seen over FY21 to FY25. Nuvama said this will be pressured by reasonable transporter utilisation levels, intensifying competition from the Railways and the commencement of the western dedicated freight corridor.
The brokerage expressed concerns around market share. LCV goods share has fallen to 27 per cent from 40 per cent in FY22, MHCV goods share has dropped to 49 per cent from 54 per cent, and MHCV bus share has slipped to 30.3 per cent from 38 per cent. It said the business will need visible improvements here for the market to revisit its valuation.
Motilal Oswal on TMCV: ‘Neutral’
Motilal Oswal held its Neutral rating and target price of Rs 341 for the standalone TMCV business. Unlike Nomura, it did not provide a rating or target timeline, and this is the only disclosed estimate after the demerger.
The brokerage said operating margin improved to 12.4 per cent from 10.7 per cent, while EBITDA rose to Rs 2,083 crore from Rs 1,653 crore. It pointed out that the exceptional mark-to-market loss of Rs 2,366 crore on Tata Capital led to a reported loss, but adjusted profit rose to Rs 1,345 crore from Rs 676 crore.
The report emphasised that the commercial vehicles industry has shown better pricing discipline over the past year, helping margin recovery. But, like Nuvama, it warned that TMCV’s market share loss across key segments remains a structural risk. It said the upcoming Iveco acquisition adds uncertainty because global CV markets are uneven, and this may influence the consolidated performance once the deal closes.