Morgan Stanley upgrades Tata Motors to 'overweight' from 'equalweight', citing more stability in the China market, the prospect for improved profitability in India, and a "strong" pipeline for unit Jaguar Land Rover, among other factors.

The upgrade comes as the investment bank raises its view on medium and heavy commercial vehicles (MHCV) sector to 'attractive', saying the segment cycle should hit a trough in the next six months.

Morgan Stanley predicts MHCV volumes will recover over fiscal 2014 and 2015 as part of a recovery in industrial activity.

Morgan Stanley also upgrades Ashok Leyland to 'overweight' from 'underweight' calling the bus and truck maker "a good proxy to play the eventual industrial recovery."

Tata Motors is down 1.2 percent, while Ashok Leyland is up 1.5 percent.


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