Tenneco Clean Air shares jump 5%; Motilal Oswal initiates coverage with Buy, sees 33% upside

Tenneco Clean Air India Ltd shares jumped around 5 per cent in Tuesday's trade after Motilal Oswal Financial Services initiated coverage on the auto component maker with a 'Buy' rating, citing its strong market position and multiple growth drivers.

The stock opened at Rs 516.60 apiece against its previous close of Rs 505.95. It touched a high of Rs 532.25 and a low of Rs 513.30 during the session. The day's high marked a gain of around 5.20 per cent over the previous closing price.

Motilal Oswal said Tenneco Clean Air holds leading positions across its Clean Air and suspension businesses, with around 58 per cent market share in commercial vehicle Clean Air, 68 per cent in off highway Clean Air excluding tractors, 20 per cent in passenger vehicle Clean Air and 55 per cent in passenger vehicle shock absorbers and struts.

The brokerage said the company's leadership positions are supported by deep relationships with original equipment manufacturers, access to Tenneco's global technology and research and development capabilities, and high entry barriers.

Growth drivers

According to Motilal Oswal, premiumisation, stricter emission norms including BS VII, CAFE III and TREM V, localisation of advanced technologies, new customer programmes and India's emergence as an export hub could drive the next phase of growth.

The brokerage expects the suspension business to grow at around 20 per cent compounded annually between FY26 and FY29, helped by increasing adoption of semi active systems, premiumisation, exports and higher share of business. It highlighted the company's DaVinci and CVSAe products as key opportunities in India's premiumisation trend.

Motilal Oswal also expects Tenneco Clean Air's Clean Air and Powertrain revenue to grow at around 17 per cent compounded annually over FY26-FY29, supported by an Rs 12,400 crore order book as of March 2026, which provides more than 100 per cent coverage of its FY28 revenue targets.

Earnings outlook

The brokerage expects consolidated earnings to grow at 19 per cent compounded annually between FY26 and FY29. It also expects profit after tax to reach Rs 1,026 crore by FY29, compared with Rs 630 crore in FY26.

Motilal Oswal highlighted Tenneco Clean Air's net cash position, negative working capital cycle, more than 90 per cent core return on capital employed and strong cash flow conversion as factors supporting its growth plans.

The brokerage initiated coverage with a 'Buy' rating and a target price of Rs 673, valuing the stock at 30 times September 2028 estimated earnings. Based on the report's reference price of Rs 506, this implied around 33 per cent upside.