Morgan Stanley upgraded Tata Motors Ltd. as it expects the next two years to be “strong” for Indian autos, and especially Tata’s Indian business because of its lean cost structure, refreshed model portfolio and financial leverage gains. That propelled the automaker’s stock by nearly 10%.

“As India’s auto cycle emerges from multi-year lows, Tata Motors will see the highest operating and financial leverage gains,” the research house said in a report as rated the company ‘overweight’ against ‘equal-weight’ earlier. “Market-share wins in India’s passenger vehicle and commercial vehicle businesses could also re-rate the name from a global luxury play to a global and India play.”

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