InCred sees 20% potential upside in Tata Motors shares; check details

Shares settle higher in trade.

InCred Equities has initiated coverage on Tata Motors’ commercial vehicle business with an ‘Add’ rating and a target price of Rs 513 per share, indicating an upside of about 20 percent from current levels.

Tata Motors shares snapped a five-day winning streak on Tuesday and ended lower on the NSE. The stock settled at Rs 427 apiece, down 3.45 percent. It touched an intraday low of Rs 422.50.

The brokerage expects a cyclical turnaround in commercial vehicle demand, led by small truck operators. It said the recovery is being driven by a recent cut in GST rates and an improvement in freight rates, which could support double-digit volume growth, CNBC-TV18 reported.

InCred said savings from lower GST on inputs such as tyres, lubricants and spare parts are likely to improve cash flows for small transporters. These savings, along with lower vehicle prices, reduce payback periods and improve affordability, particularly under the reverse charge mechanism of the GST regime.

The brokerage expects the recovery in demand to be sustained through FY28, aided by easing interest rates and a pick-up in industrial activity, as reflected in the Index of Industrial Production.

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