Brokerage firm HSBC has initiated coverage on Tata Motors Commercial Vehicles Ltd. (TMLCV), the newly demerged commercial vehicle arm of Tata Motors, with a 'Buy' rating and a price target of ₹380.

The brokerage has also raised its price target for Ashok Leyland to ₹160 from ₹145 earlier, while maintaining a 'Hold' rating.

HSBC has valued both Tata Motors'commercial vehicle business and Ashok Leyland at 14 times their estimated FY27 EV/EBITDA.

Tata Motors completed its demerger on October 1, splitting the business into separate passenger vehicle (PV) and commercial vehicle (CV) entities. The CV business is now independently listed.

Currently, the CV industry (Ashok Leyland and TMLCV) trades at a 1-year forward EV/EBITDA of around 12x, while the PV industry trades at 15-17x.

HSBC said

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