After a fall of nearly 45% in the past six months, the prospects for a rally in Tata Motors' shares look bright now. A downtrend in Tata Motors stock price was due to its disappointing earnings in the past two quarters.

India's largest automobile manufacturer, Tata Motors reported nearly 49% drop in its net profiit in the first quarter of current financial year (2015-16) due to declining sales in the world's biggest car market, China.

A slump in sales is largely led by slowing economic growth in its key market China and weakening consumer sentiments in India. China is the largest market for Tata Motors' subsidiary Jaguar Land Rover (JLR), accounting for 20% of its sales.

But many analysts are now turning bullish over the stock, taking into account cheap valuations and expected revenue growth from China.

Global investment bank Barclays maintains an 'overweight' outlook on the stock and expects the prices to go up by more than 60% in one year. The bank has a target price of Rs 560 for Tata Motors. The stock closed at Rs 336.80 on Wednesday on the Bombay Stock Exchange (BSE).

"In FY16/17, we expect the revenue contribution of China to stand at 24 percent/17 percent, respectively. Based on our estimates China accounts for 32 percent/25 percent of JLR's (parent) EBITDA, respectively," Barclays told CNBC-TV18.

Parag Thakkar of HDFC Securities also forecasts a positive outlook for the Tata Motors stock saying "it is extremely attractive at this point."

"While China is into problems and Chinese demand will be slow, I feel at current price everything is captured in," Thakkar said.

He expects Tata Motors to benefit from falling raw material costs. Aluminum, which accounts for 65% of Tata Motors raw material expenses, has seen a significant decline in prices recently. Thakkar expects the positive impact of falling raw material costs to be felt from Q3 this fiscal year.

He also said a recovery in commercial vehicles sales will bring down the standalone loss of the company.

"So, in my view, from risk reward perspective, Tata Motors is a great buy at this point of time."

"Now at Rs 330 most of the negatives are discounted for Tata Motors and ultimately one fine day I am going to see the stock much higher than where it is today," Money Control quoted Mehraboon Irani of Nirmal Bang Securities.