Tata Stock Crashed: Why Tata Motors Share Fell By 9% On Jan-30? Brokerages Downgrade, Cut Targets

Tata Motors Share Crash: The Tata Group-backed automobile giant stock nosedived by more than 9% on Thursday, January 30th, to hit a new 52-week low of Rs 684.25 apiece. The performance comes after Tata Motors missed estimates in its Q3 results for FY25. Following the third quarterly earnings report, global brokerages have downgraded their stance on Tata Motors, while also lowering their target prices.

Tata Motors Share Price:

At the time of writing, Tata Motors' share price traded at Rs 695.30 apiece, down by Rs 57.15 or 7.60% on BSE. Its market cap stood at Rs 2,55,911.80 crore. In the early trade, Tata Motors' share price touched a new 52-week low of Rs 684.25 apiece, falling by 9.06% overall in the day.

Tata Motors has now nosedived by nearly 42% from its 52-week high of Rs 1,179.05 apiece. Year-to-date, the stock plunged nearly 7%.

Tata Motors Q3 Results A Miss:

The auto player posted about 22.5% decline in net profit to Rs 5,451 crore in Q3FY25, compared to the net profit of Rs 7,025 crore reported a year ago same quarter. Also, EBITDA declined by 14.7% to Rs 13,081 crore in Q3FY25, as against Rs 15,333 crore EBITDA in Q3FY24. However, revenue climbed by 1.8% to Rs 1.13 lakh crore in the third quarter of FY25, compared to revenue of Rs 1.11 lakh crore in Q3 of FY24.

Tata Motors missed estimates across all verticals in Q3FY25.

Meanwhile, the company's luxury brand Jaguar Land Rover (JLR) posted Q3 FY25 Revenue at £7.5 billion (+1.5%), EBITDA of 14.2% (-200 bps), EBIT of 9.0% (+20 bps), and PBT (bei) £523 million in Q3FY25.

Looking ahead, Tata Motors said that they expect underlying domestic demand to improve gradually on account of infrastructure spending, a slew of exciting product launches and stable interest rates. While JLR wholesales are expected to improve further in Q4 FY25, it said, "we remain watchful on the overall demand situation, particularly in China."

Tata Motors Share Price Recommendation:

Brokerage Nuvama is now predicting muted revenue and EBITDA CAGR of 2% each over the financial years 20225-2027. Meanwhile, brokerage UBS pointed out that Tata Motors Q4 outlook is ambitious considering the fiscals FY26 and FY27 are likely uncertain.

Nuvama maintained REDUCE on Tata Motors, while trimming its target price to Rs 720 from earlier Rs 750. While Morgan Stanley maintained 'EQUAL Weight' but reduced its target price to Rs 853 versus Rs 920. Furthermore, Jefferies downgraded its stance to 'Underperform' and also lowered its target price to Rs 660 which is a sharp cut from previous target of Rs 1,000. The three brokerages have now given Negative outlook.

On the other hand, Goldman Sachs has given Neutral outlook on Tata Motors for target price of Rs 800 per share. Noteworthily, CLSA maintained outperform rating on Tata Motors with neutral outlook, while setting a target price of Rs 930.

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