Tata Motors shares gain 1.4% after Goldman Sachs says the auto maker's market cap has potential to reach $30 billion by fiscal 2017, from current value of $13.8 billion, and to nearly double its cash flow during these four years.
To get there, Goldman says Tata's Jaguar Land Rover unit would need to move to a new platform for its existing models such as Range Rover and Discovery with a light weight aluminium architecture, thus improving key factors such as fuel efficiency or pricing.
JLR would also need to make inroads into smaller engine and lower priced vehicles, as well as enter more premium segments, Goldman argues.
However, challenges include getting consumers to buy into the brand, tightening regulations in key markets such as Europe, and overcoming macro economic uncertainties such as FX volatility.
Goldman Sachs maintains Tata Motors at 'buy', with a target price at 334 rupees.