Bank of America-Merrill Lynch upgrades Tata Motors to 'buy' from 'neutral' and raises its target price to 360 rupees from 285 rupees.

BofA-Merrill cites expectations Tata's key unit Jaguar Land Rover would meet full-year sales expectations of 363,000 units and sustain momentum.

At home, the investment bank says Tata's truck/bus unit is closer to a trough, while light commercial vehicles are "growing ahead of peers" and the utility vehicles segment is benefitting from a structural uptrend.

The domestic cars unit may not recover, Boa-Merrill adds, but says lowered expectations have been built into forecasts.

Shares in Tata Motors were last up 0.6 percent at 318.5 rupees.