Tata Group-backed automobile giant, Tata Motors Ltd has corrected significantly ahead of Samvat 2081. The auto player's share price dipped by 4% on weekly basis, while the stock has tumbled by nearly 14% on monthly, and it plunged by nearly 19% in six-months span. The stock has corrected from near Rs 1,180 levels to below Rs 850 in less than a year. Since the stock has already corrected significantly, there is buy-on-dips opportunity. And despite the latest fall, Tata Motors is Prabhudas Lilladher's top pick for SAMVAT 2081.
Tata Motors Share Price:
Currently, the stock price is at Rs 834.10 apiece, down by 0.74% after market hours of October 31, on BSE. The company's market cap is around Rs 3,07,031.52 crore.
The stock has corrected sharply from its 52-week high of Rs 1,179.05 apiece. Its price-to-equity ratio is at 30.23x, while return on equity is around 33.69%.
Tata Motors weekly performance is down by 3.82%, while in a month, it dipped by 13.60%. In six-months span, the stock has nosedived by 18.86%. Six months ago, the stock was around Rs 1,028 apiece. Nonetheless, YTD, the stock is still up by 5.5%.
Among the key reasons why Tata Motors shares fell is because of concerns related to lacklustre demand in sales during the festive season. As per the Federation of Automobile Dealers Associations (FADA), personal vehicle sales witnessed a growth of 18.81% in September 2024, which was down year-on-year. Also, reports have stated that the inventor of vehicles is to the tune of 7.9 lakh, worth approximately Rs 79,000 crore.
Earlier on Tata Motors, SMIFS' report said, Tata PV retail sales are flat, but dealers are hopeful for a positive outcome by the end of the 32- days festive period. The Curvv model received positive feedback post-test drive, but overall retails are lower than expected. Petrol models are selling the most, followed by EVs & Diesel. The Nexon CNG is receiving a healthy response, though this has impacted the petrol model. Various promotions, including cash discounts, free accessories, exchange offers, and corporate discounts, are available across most models.
Going ahead, the stock will be in focus for its upcoming Q2 results for FY25. Tata Motors Board of Directors are scheduled to meet on November 8, 2024 ,inter alia, to consider and approve the Audited Standalone Financial Results and Unaudited Consolidated Financial Results (with Limited Review) for the second quarter and half year ended September 30, 2024.
Prabhudas Lilladher on Tata Motors:
As per the brokerage, the stock has witnessed a decent erosion since the last one month from the peak zone of 1142 to move below the important 200 period MA of 960 to currently consolidate and take support near the 915 level of the long-term trendline zone.
It added, "The RSI has almost arrived near the oversold zone and has been hovering near this area for quite some time with a gradual rise visible to improve the bias. With the risk-reward favorable and the chart technically looking very attractive, we anticipate for further rise and suggest buying the stock for an upside positional target of 1225 keeping the stop loss at 770 level."
Tata Motors Split-Up:
The auto giant is set to split in the ratio of 1:2. The company is planning the demerger of Tata Motors into two separate listed companies housing A) the Commercial Vehicles business and its related investments in one entity and B) the Passenger Vehicles businesses including PV, EV, JLR, and its related investments in another entity.
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