Why Is JM Financial Bullish on Tenneco Clean Air India Despite EV Transition Risks?
About the Broker Call
JM Financial has initiated coverage on Tenneco Clean Air India Ltd with a BUY recommendation, highlighting the company’s dominant positioning in emission control systems and its ability to outperform peers despite structural changes underway in the automotive industry.
Tenneco Clean Air India, a subsidiary of US-based Tenneco Group, operates as a Tier-1 automotive component supplier with deep relationships across passenger vehicles, commercial vehicles, and off-highway segments. The brokerage believes the company is well placed to benefit from tightening emission norms and increasing content per vehicle.
Key Investment Highlights
🔹 Dominant market share in clean air and powertrain solutions.
🔹 Strong OEM relationships across PV, CV, and off-highway segments.
🔹 Beneficiary of stricter emission norms and premiumisation.
🔹 Consistent outperformance versus domestic peers.
JM Financial notes that TCAL holds about 40 percent share in PVs, 62 percent in CVs in Clean Air & Powertrain, and nearly 68 percent in off-highway OEMs. In advanced ride technologies, it commands close to 52 percent market share in passenger vehicles.
For traders tracking auto ancillaries during sector rotations, aligning exposure using a Nifty Tip framework helps manage volatility while capturing relative strength.
Financial and Valuation Snapshot
| Metric | Details |
|---|---|
| CMP | ₹531 |
| Target Price | ₹610 |
| Valuation | 24.8x FY28E EPS |
The brokerage expects a CAGR of around 14–17 percent across revenue, EBITDA, and PAT during FY25–FY28, driven by higher content per vehicle, export growth, and emission-led upgrades.
Strengths🔹 Market leadership in emission control. 🔹 Strong technology and OEM trust. |
Weaknesses🔹 EV transition creates medium-term uncertainty. 🔹 Dependence on ICE volumes. |
Despite EV-related risks, JM Financial believes hybrids, CVs, and off-highway segments will sustain demand in the near to medium term.
Opportunities🔹 Stricter emission norms. 🔹 Export expansion. |
Threats🔻 Faster-than-expected EV adoption. |
Valuation and Investment View
JM Financial’s target of ₹610 implies meaningful upside, backed by earnings visibility and sector tailwinds. Traders may also align positions tactically using a BankNifty Tip framework during volatile market phases.
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes that auto ancillary leaders with regulatory tailwinds and pricing power merit closer attention during consolidation phases. A structured, risk-aware approach helps investors participate without overexposure. Read more free analysis at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Tenneco Clean Air and Auto Ancillaries
Is Tenneco Clean Air a good long-term bet?
How emission norms impact auto ancillaries?
What risks EV transition poses to TCAL?
Why JM Financial likes Tenneco Clean Air?
Are auto ancillaries still attractive?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
