Tata Motors Ltd, backed by the Tata Group, has recently experienced a significant decline in its share price, which is currently around ₹834.10. The stock has fallen approximately 4% on a weekly basis, nearly 14% over the past month, and around 19% in the last six months, down from a 52-week high of ₹1,179.05. This downward trend has led analysts at Prabhudas Lilladher to classify Tata Motors as a buy-on-dips opportunity, despite the recent corrections, and they have set a target price of ₹1,225 for the upcoming Samvat 2081.
Key Highlights:
- Stock Performance: Tata Motors has faced a notable correction, with a current price of ₹834.10 per share, down by 0.74% as of October 31, after market hours. The company’s market capitalization stands at approximately ₹3,07,031.52 crore.
- Sales Concerns: One of the main reasons for the stock’s decline is the lackluster demand during the festive season. According to the Federation of Automobile Dealers Associations (FADA), personal vehicle sales saw an 18.81% growth in September 2024 compared to the previous year, indicating weaker performance.
- Retail Sales Insights: While Tata’s retail sales have remained flat, there are some positive signals. The new Curvv model has received favorable feedback from test drives, and the Nexon CNG has shown strong consumer interest. Various promotional strategies, including cash discounts and exchange offers, are being implemented to boost sales.
- Upcoming Q2 Results: Tata Motors is scheduled to release its Q2 FY25 financial results on November 8, 2024. Investors will be looking for insights into the company’s performance and market strategies.
- Technical Analysis: Analysts note that the stock has corrected from its previous high of ₹1,142 and is currently consolidating near important support levels. The stock’s Relative Strength Index (RSI) is nearing the oversold zone, suggesting a potential rebound. Prabhudas Lilladher recommends buying the stock, targeting ₹1,225, with a stop loss set at ₹770.
- Corporate Developments: Tata Motors is also planning to execute a 1:2 stock split, which will separate its business into two distinct entities: one focusing on commercial vehicles and the other on passenger vehicles, including electric vehicles and Jaguar Land Rover (JLR).
In summary, while Tata Motors has faced significant price corrections and challenges in demand, analysts believe there is a buying opportunity due to the stock’s technical indicators and upcoming corporate developments.
Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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