Tata Motors CV shares can go up to ₹513; InCred bets on strong volume growth

InCred Equities has initiated coverage on Tata Motors' commercial vehicle business, assigning an 'Add' rating with a price target of ₹513 per share. This implies an upside of about 16% from current levels.

The brokerage expects a cyclical turnaround in commercial vehicle demand, led by small truck operators. This recovery is being driven by a recent GST rate cut and an improvement in freight rates, which InCred believes could drive double-digit volume growth.

After a prolonged downturn that played out over six quarters between April 2024 and July 2025, business conditions for small transporters have improved sharply following the GST rate cut in September 2025. The brokerage said this has materially improved operating economics for small operators, triggering a revival in demand for new trucks.

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

Looking ahead, InCred expects demand recovery to be sustained through FY28, supported by easing interest rates and an improvement in industrial activity, as reflected in the Index of Industrial Production.

The brokerage also underscored Tata Motors' strong positioning among small operators and its wide tonnage portfolio, which should help the company regain market share during the current upcycle.

InCred values the CV business at 12.5x EV to EBITDA, with the value of other segments estimated at ₹25 per share, arriving at a price target of ₹513.

Shares of Tata Motors CV are trading 3.01% lower on Monday at ₹428.95.