Nuvama Institutional Equities said Tata Motors Ltd's commercial vehicle (TMCV) business reported a 22 per cent year-on-year (YoY) rise in standalone revenue to Rs 24,450 crore in Q4 FY26, though the figure came in marginally below its estimates due to weaker-than-expected realisations.

EBITDA jumped 36 per cent to Rs 3,310 crore but remained below expectations due to the revenue miss and elevated other expenses.

"We are trimming FY27–28E EPS by up to 4 per cent, factoring in lower volume assumptions and cost pressures. Following the revision, we reckon revenue/EBITDA CAGR of 9 per cent/8 per cent over FY26–28E," Nuvama said.

The brokerage expects the company's export business to remain a key growth driver over the next few years.

"We are building in a 6 per cent volume CAGR over FY26–28E, led by 48 per cent CAGR in exports owing to large order of ~70,000 units from Indonesia," it also stated.

Despite lowering earnings (EPS) estimates, Nuvama retained its positive stance on the stock while reducing the target price.

"Retain 'BUY' with a TP of Rs 480/share (from Rs 500), based on 14x FY28E EV/EBITDA for core business, Iveco value at Rs 91/share, Tata Capital value at Rs 13/share. TMCV trades at 15x/14x FY27E/28E EV/EBITDA," it said.

The brokerage noted that TMCV could outperform the broader domestic CV industry over FY26–28E.

"TMCV is likely to slightly outpace the industry with domestic volumes likely to grow at a 3 per cent CAGR over FY26–28E. Moreover, backed by a large export order from Indonesia for 70,000 units (35,000 units each of the Yodha pickup and Ultra T.7 trucks), we reckon exports shall clock a strong 48 per cent CAGR," Nuvama mentioned.

On the electric vehicle (EV) front, the brokerage said the company is expanding its footprint.

"TMCV is strengthening its presence in EVs with focus on both the passenger and cargo segments. It has delivered more than 3,800 units and the company is now evaluating participation in upcoming tenders due to recent government assurances on payment security," the brokerage stated.

Nuvama added that Tata Motors recently launched multiple electric trucks of up to 55 tonnes and is also scaling up sales of its small commercial vehicle (SCV) model, Ace.

Meanwhile, Tata Motors (TMCV) shares settled 1.26 per cent lower at Rs 379.50 on Thursday.