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Auto component and clean mobility technology stocks witnessed vigorous action in the domestic stock market on Tuesday, September 15, 2026, when leading brokerage house Motilal Oswal Financial Services (MOFSL) released its new coverage report on Tenneco Clean Air India shares. The brokerage firm has given a straight ‘Buy’ rating to the stock, highlighting the company’s strong fundamentals, multinational supply network and the upcoming implementation of stricter regulations related to automotive emissions. Motilal Oswal has set a base case target price of ₹673 for the company’s stock, which represents a solid upside of about 33 per cent over Friday’s closing price of ₹506.35. The most aggressive estimate by analysts comes in its ‘Bull Case’ scenario, where the brokerage has set an ambitious target of ₹886, which clearly indicates the potential for huge profits of around 75 per cent from the current market price. As soon as this detailed brokerage note became public, there was heavy buying by investors in the company’s shares on Dalal Street and the stock jumped by 3 percent during the trading session.
According to Motilal Oswal’s research report, Tenneco Clean Air is not just a traditional auto equipment manufacturer, but is on the cusp of a major structural evolution with its clean air (emission control) and advanced suspension products. The company is positioned for strong performance during FY 2026 to FY 2029 due to stricter emission norms being implemented by the Government of India for vehicles, rapid premiumization of passenger cars, expansion of new customer programs globally and increasing exports from Indian production units. The brokerage estimates the company’s net income to grow at a compound annual growth rate (CAGR) of around 19 per cent during the period, while its clean-air and powertrain revenues are projected to grow at an annual rate of 17 per cent. The company had a huge order book of ₹12,400 crore as of end March 31, 2026, providing clear visibility and security of more than 100 percent of the estimated revenue target for FY2028.
Tenneco Clean Air’s level of market share is unparalleled in the Indian automotive ecosystem. The company has a market share of approximately 58 per cent in clean air products supplied to commercial vehicle (CV) original equipment manufacturers (OEMs). Apart from this, the company has almost a monopoly position in other off-highway applications except tractors with 68 percent market share, while in the passenger vehicle category its market share is at the level of 20 percent. On the suspension system front, the company has a market share of about 55 percent in passenger-vehicle shock absorbers and struts. Analysts at Motilal Oswal believe that being part of the core global Tenneco Clean network, the Indian unit directly benefits from global intellectual property (IPs), research and development (R&D) capabilities, international patents and long-term relationships with leading foreign OEMs. Due to the company’s deep technical involvement in the product development cycles of vehicle manufacturers, the switching costs for customers become extremely high, which ensures that the company’s orders are completely secured for a long time.
Regulatory changes are going to be the biggest revenue multiplier for the company in the coming years. The brokerage report states that the implementation of BS-7 (BS-VII), Corporate Average Fuel Economy (CAFE III) and TREM-5 (TREM-V) emission standards for agricultural and construction equipment in India will open the door to unprecedented earnings for the company. Under BS-7, exhaust after-treatment systems in commercial vehicles will become extremely complex, leading to a huge jump in the financial value of clean air content per vehicle. The current low penetration in light commercial vehicles (LCV) gives the company an opportunity to expand its reach rapidly. The 30 to 50 horsepower segment accounts for 90 per cent of the tractor market, where the price of clean air components per tractor can reach ₹5,000 to ₹7,000 due to the addition of after-treatment equipment with the advent of Trem-5 standards. Clean air content per vehicle is expected to increase by approximately 1.3 times due to the mandatory use of Gasoline Direct Injection (GDI) and Gasoline Particulate Filters (GPF) in passenger cars.
Tenneco Clean Air has achieved a major technological milestone in recent months in the field of suspension solutions. The brokerage expects the company’s suspension business to grow at a CAGR of 20 percent during FY26 to FY29. Premiumization of vehicles, exports and increasing demand for semi-active suspension systems are the main factors behind this growth. The company has successfully commercialized its indigenously refined ‘DaVinci DCx’ suspension system in collaboration with the country’s leading SUV manufacturer Mahindra & Mahindra in February 2026. This unique technology provides approximately 85 to 90 percent of the ride-comfort of high-end semi-active systems at a very economical cost. The passenger vehicle segment in the price range of ₹10 lakh to ₹35 lakh accounts for around 70 per cent of the total car market in India, and this innovation directly targets this huge and fast-growing segment, which is bound to yield huge volumes in the future.
Tenneco Clean Air India is being developed as a major manufacturing and strategic export hub within the global Tenneco Group amid the restructuring of the global supply chain. Presently the company is regularly supplying high-tech auto components to 18 to 22 developed countries in North America, Europe, Asia-Pacific and Africa from its state-of-the-art plants in India. Motilal Oswal estimates that the share of exports in the company’s value-added revenue will double from the current 7 percent to 15 percent by FY 2029. Exports already account for 14 per cent of the company’s current order book of ₹12,400 crore. Analysts clearly say that the operating margins of these products sent to international markets are much better than the domestic trade, which will help in raising the overall profits of the company.
According to the financial modeling charts released by the brokerage house, the financial health of Tenneco Clean Air is going to be exceptionally strong in the coming years. The estimated revenue of the company in FY 2026 is estimated at ₹ 5,404 crore, which is expected to increase to ₹ 8,985 crore by FY 2029. During the same period, the company’s operating profit or EBITDA may jump from ₹ 925.5 crore to ₹ 1,560.8 crore, due to which its EBITDA margin will improve from 17.1 percent to 17.4 percent. Adjusted net profit after tax (Adjusted PAT) is expected to cross the mark of ₹1,026 crore from ₹630.4 crore and earnings per share (EPS) is estimated to increase from ₹15.6 to ₹25.4. The biggest feature of the company’s balance sheet is its net cash being positive, working capital being negative and core RoCE remaining above 90 percent. Apart from this, Operating Cash Flow to Ebitda (CFO/EBITDA) is estimated to be above 70 percent and Free Cash Flow to PAT (FCF/PAT) is estimated to be above 80 percent, which makes the company completely financially self-reliant despite heavy capital expenditure.
On the valuation front, at the reference price of ₹506, Tenneco Clean Air shares are trading at a P/E multiple of 26.1 times FY2028 estimated earnings and 19.9 times FY2029 earnings. Motilal Oswal has set a base case target of ₹673, applying a 30x valuation multiple to expected September 2028 earnings. In its bull case scenario, the brokerage believes that if there is timely and full implementation of BS-7 standards, slow penetration of electric vehicles and a sharp uptick in the suspension business, then the stock will reach an all-time high of ₹886 on the back of 22.7 per cent revenue CAGR, which represents an upside of 75 per cent. Conversely, in the bear case, if BS-7 is delayed or EV adoption suddenly accelerates, revenue growth may be limited to 15 per cent and the share price may fall to ₹521. The brokerage has identified EV conversion, expiry of technology licenses, pressure from private equity exits and competition from global giants like Bosch, Denso and NGK as key risks. Currently, out of seven major brokerage institutions keeping an eye on the company, 6 have given it ‘Buy’ rating and 1 has given ‘Sell’ rating, due to which there is a positive trend regarding the stock in the market.