Tata Motors zooms 30% in 1 month; what's driving commercial vehicle stock?

Tata Motors will likely maintain its dominant share in the vehicle market segment, with support from India's economic growth, favourable infrastructure and construction spending, believe analysts.

Tata Motors share price today

 

Share price of Tata Motors (formerly known as TML Commercial Vehicles) continued its upward movement, hitting a new high of ₹403.10, soaring 4 per cent on the BSE in Thursday’s intra-day trade on expectations of a strong business outlook. The company made its stock market debut on November 12, 2025 post demerger.

 

Thus far in the month of December 2025, Tata Motors has rallied 14 per cent, as compared to 1.4 per cent decline in the BSE Sensex and 2 per cent fall in the BSE Auto index. In the past one month, the stock price of Tata group’s commercial vehicle company has zoomed 30 per cent from a level of ₹310 touched on November 18, 2025.

 

 

What’s driving Tata group’s commercial vehicle company?

 

In November, Tata Motors’ total CV volumes rose by a whopping 28.6 per cent year-on-year (YoY) at 35,539 units. The growth was broad-based, with heavy commercial vehicle (HCV) and light and medium commercial vehicle (ILMCV) segments recording strong double-digit gains of 34.2 per cent and 35.0 per cent YoY, respectively, while SCV cargo & pickups grew 19.0 per cent YoY.  The growth is supported by better fleet utilization levels as consumption picked up since the festive period. Exports surged 91.7 per cent YoY, reflecting sustained strong overseas demand.

 

Tata Motors will likely maintain its dominant share of India’s commercial vehicle (CV) market, with support from India’s economic growth, and favourable infrastructure and construction spending.

 

Meanwhile, in the September quarter (Q2FY26), Tata Motors said it saw a strong free cash flow of ₹2,200 crore. This is led by a sustained operational performance and working capital gains owing to higher volume. H1FY26 free cash flow (FCF) was a record ₹417 crore. This was the highest-ever with strong cash profit after tax of ₹4,200 crore. 

 

The management expects the company’s FCF to be consistent with the likely growth in H2 volume. Significant reduction in interest charge as a result of deleveraging, Tata Motor’s interest cost has been kind of coming down, and will see that quarter-on-quarter.

 

“Tata Motors will likely maintain a positive free cash flow and low leverage, given operating cash flows may sufficiently cover spending over the next three years. While Tata Motors' proposed acquisition of Iveco Group N.V. could significantly increase leverage, the transaction is largely credit neutral due to our expectations of stronger business competitiveness”, the S&P Global Ratings said.

 

The rating agency believes India’s large and growing economy will support CV demand from higher government spending on infrastructure and construction along with buoyant consumer spending. Lower interest rates will also help. Adding to the above is India's recent reform of its goods and services tax (GST), which could lead to further price reductions and higher fleet utilization. S&P Global Ratings believe this will help lift demand for the intermediate, light, and medium CV segments. As a result, Tata Motors' annual volume sales may increase by low single digits over the next three years, it added.

 

High growth and higher-margin revenue streams (bus, exports, digital and downstream businesses) are insulating Tata Motors from CV-cycle volatility. Industry transition to higher gross vehicle weight (GVW) is a tailwind for Tata Motor’s ASP and profitability growth, given its heavy truck leadership. Tata Motor’s product and technology interventions should help improve MS, especially in the small commercial vehicles (SCV) segment, aided by improved financing. Operating leverage, post-demerger cost rationalizations, and PLI benefits create room for margin revision with volume growth, analysts at Ambit Institutional Equities said in its report with a ‘Buy’ rating on the stock and target price of ₹430 per share.  ====================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.