**Motilal Oswal has issued a buy rating on Tenneco Clean Air with a target price of ₹673 in its research report dated September 15, 2026. According to the brokerage's analysis, the recommendation is based on 30x September 2028E earnings valuation. The recommendation comes as part of Motilal Oswal's coverage initiation for the stock. Shares were trading nearly 3% higher on Tuesday, September 15, after the brokerage initiated coverage, with the stock currently trading at ₹519, just above its IPO price of ₹397. At the reference price of ₹506, the stock was trading at 26.1 times FY28E earnings and 19.9 times FY29E earnings.
Tenneco Clean Air maintains strong market positions across multiple segments, holding approximately 58% share in CV Clean Air, 68% in off-highway Clean Air (ex-tractors), 20% in PV Clean Air and 55% in PV shock absorbers/struts. As reported by Motilal Oswal, the company benefits from deep OEM integration and access to Tenneco's global technology and intellectual property, creating strong entry barriers for competitors. The growth strategy focuses on premiumization, BSVII compliance, CAFE III and TREM-V regulations, alongside localization of advanced products and new customer programs. The company's order book stood at ₹12,400 crore as of March 31, 2026, providing more than 100% coverage of its FY28 revenue target.
According to Motilal Oswal's analysis, Tenneco Clean Air demonstrates a capital-efficient model with a strong balance sheet. The brokerage expects the company to achieve sustained earnings growth through multiple avenues including market-share gains and wallet-share expansion. Clean-air and powertrain revenue is expected to grow at around 17% CAGR over FY26-FY29, while the company's earnings Compound Annual Growth Rate (CAGR) is estimated at 19% between FY26 and FY29. Revenue is projected to rise from ₹5,404 crore in FY26 to ₹8,985 crore by FY29, with EBITDA increasing from ₹925.5 crore to ₹1,560.8 crore over the same period, and EBITDA margin expanding from 17.1% to 17.4%. Adjusted profit after tax is estimated to rise from ₹630.4 crore in FY26 to ₹1,026 crore in FY29, while EPS is expected to increase from ₹15.6 to ₹25.4.
Tenneco Clean Air is being positioned as a manufacturing and export hub within the global Tenneco network, with products supplied across North America, Europe, Asia-Pacific and Africa. The company currently exports to around 18-22 countries and exports account for around 14% of the current order book, generally carrying higher margins than domestic business. MOFSL expects exports to increase to 15% of value-added revenue by FY29 from 7% currently. The company's integration with the global Tenneco network provides access to technology, intellectual property, global OEM relationships, research and development capabilities and manufacturing expertise. Its involvement in customer product-development cycles also creates high switching costs for competitors.
Motilal Oswal's bull case assumes 22.7% revenue CAGR through FY29, full implementation of BS-VII, slower EV adoption and faster suspension growth, giving Tenneco Clean Air a price target of ₹886, implying an upside potential of around 75% from current levels. The bear case assumes 15% revenue CAGR because of delays in BS-VII, slower DaVinci adoption and faster EV penetration, resulting in a target of ₹521, implying around 3% upside. The brokerage flags faster-than-expected EV adoption, termination of technology licence, private-equity exit overhang, intensifying competition, commodity-price fluctuations and loss of key customers as main risks. Tenneco's powertrain business remains exposed to the transition away from ICE vehicles, while competition from established players such as Bosch, Denso and NGK remains a longer-term risk.
