Stock broker ICICIdirect has upgraded Tata Motors (TML) to Buy with target price of Rs 360.

Commenting on the investment rationale, the broking firm said, "TML under the stewardship of Karl Slym has set the ball rolling for aggressive R&D in passenger vehicles in India. The company has plans to reverse the tide of low volumes, heavy discounting and declining market share by investing Rs 7.5 billion in the domestic passenger vehicle segment.

The focus on R&D is similar to the path JLR is following, which is of launching new path breaking products in the segment. The new products including a mini-SUV, diesel and CNG variants of the Nano will be launched starting from FY14E.

This period may also witness both Jaguar-Land Rover (JLR) and the domestic business performing together, as JLR has a significant product up-cycle starting from H1FY14E.

Tata Motors looks set to enter the purple patch of earnings with interest rate cycle reversal in India coupled with newer product launches complementing the global business of JLR.

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