Tata Motors’ share price continued to take a beating on the bourses on Friday.
The stock slumped around 2% to hit an intraday low of ₹669.15.
In the past six months, the Tata Group company has seen its shares crash over 35%.
Tata Motors stock, which set multiple record highs between March 2023 and July 2024, has since lost its luster among investors, marking six consecutive months of decline.
The downtrend continued into February, with the stock hitting a 14-month low of ₹667 apiece during Wednesday’s session on February 12.
From its all-time high of ₹1,176 apiece in July 2024, the stock has seen a significant correction of 42%.
Tata Motors’ share price: technical outlook
“Tata Motors is approaching a crucial support level at ₹659, a level we’ve been tracking for some time,” said Anshul Jain, Head of Research, Lakshmishree Investments & Securities.
He added that the stock’s short-term structure remains extremely weak, but with ₹659 as strong weekly chart support, a potential bounce toward ₹771 may be possible.
“Notably, the recent decline hasn’t seen significant volumes, suggesting that selling pressure is fading,” the analyst told Invezz.
If buyers step in at this level, we could witness a strong reversal. Investors should closely monitor price action around this zone, as a rebound could offer lucrative short-term trading opportunities.
Riyank Aroroa, Technical Analyst at Mehta Equities noted that Tata Motors has declined by approximately 6.57% in February, while the broader Automotive index has dropped around 4.23% during the same period.
“Technically, the auto sector remains weak, and the stock is experiencing selling pressure. Traders should maintain a strict stop-loss at ₹665, with potential upside targets at ₹690 and ₹695,” Arora added.
However, a break below ₹665 could lead to further weakness, pushing the stock towards ₹640 – ₹630 levels. We recommend traders adhere to strict stop-loss levels, while long-term investors need not be concerned.
Why is Tata Motors share price taking a dive?
The recent slide in the auto giant’s stock has been driven by the disappointing December quarter earnings.
Weak performance from Jaguar Land Rover (JLR), a decline in commercial vehicle (CV) sales, economic headwinds in European markets, and subdued demand in China weighed on the company’s Q3 FY25 performance.
Net profit dropped 22.5% year-on-year to ₹5,578 crore in Q3 FY25, down from ₹7,415 crore, while revenue saw a modest growth of 2.7%, reaching ₹1,13,575 crore.
Despite JLR’s EBIT margins improving to 9% during the quarter, analysts attributed much of this improvement to reduced depreciation rather than operational efficiency.
Amid challenges in key markets, the company has slightly lowered its FY25 JLR revenue guidance to £29 billion from the earlier £30 billion, while maintaining its EBIT margin forecast at 8.5%.
Several analysts have revised their ratings and target prices for the Tata Motors stock following its disappointing December quarter results and ongoing challenges in key markets.
Nuvama has lowered its target price to ₹720 from ₹750 while maintaining a ‘reduce’ rating on the stock. Similarly, InCred Equities has kept its ‘reduce’ rating intact, with a target price of ₹746.
Motilal Oswal has maintained a ‘neutral’ rating, assigning a target price of ₹755. Meanwhile, Morgan Stanley has reduced its target price to ₹853 from ₹920 but maintained its ‘equal weight’ rating.
In a sharper move, Jefferies downgraded the stock to ‘underperform’ from ‘buy’ and significantly reduced its target price to ₹660.
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