Nomura’s Tata Motors Analysis: A Potential Upside

Nomura, a large investment firm, has recently started paying attention to Tata Motors (TMCV). They believe TMCV is in a good position to grow, especially in India’s truck market. Their recommendation is “Buy,” and they think the stock price could go up significantly.

Key Points

• Nomura recommends buying Tata Motors due to market growth.
• TMCV is expected to grow 8-10% in truck sales yearly.
• Rising freight rates and older trucks drive new truck demand.
• Tata Motors dominates the Indian truck market with 46% share.
• IVECO acquisition boosts profits and offers new opportunities.
• Nomura’s predictions are 12-11% higher than current estimates.

The Indian market for medium and heavy commercial vehicles (M&HCVs) is expected to improve. Experts predict truck sales will increase by about 8% to 10% each year over the next few years. This increase is driven by higher prices for transporting goods and the fact that many trucks are quite old – around 10 years on average.

Tata Motors already has a big share of this market, holding 46% of the business in India as of 2025. This strong position helps Nomura’s “Buy” recommendation.

Nomura also thinks Tata Motors’ recent purchase of IVECO’s truck business is a smart move. This acquisition, totaling EUR 3.8 billion, is expected to increase profits. It will also open up new opportunities for Tata Motors.

However, IVECO’s truck business has been struggling recently (a “downcycle”), but Nomura expects things to improve starting in 2027. They’re using a method called “sum-of-the-parts” to value the company. This means they’re looking at the value of each part of Tata Motors separately to get a total picture.

Specifically, they value Tata Motors’ truck business at 12 times its expected profits and IVECO at 4 times its profits – which is on the lower end compared to other similar companies.

Nomura believes that as Tata Motors and IVECO work together more closely, especially in areas like sharing supplies and developing new products, the value of IVECO will go up even further.

Their analysis suggests that Tata Motors’ earnings will be higher than what most other experts predict by 12% and 11% for the years 2027 and 2028.

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