Shares of multibagger Tata Motors Ltd have turned bearish in the short term. Tata Motors stock has closed lower in the last four of the five sessions, leaving investors puzzled about the outlook of the stock. The move is exactly opposite to the benchmark Sensex of which the Tata Group stock is a component. The 30-stock index has closed higher in the last four of the five sessions.
The Tata Group stock ended 0.99% lower at Rs 612.20 on BSE on Tuesday. During the session, the stock also hit an intraday low of Rs 607.20 and an intraday high of Rs 621 on BSE.
ALSO READ: Rs 51 to Rs 971: This IT stock turned into a multibagger in three years
Tata Motors stock opened higher at Rs 621 on Tuesday. Market cap of the firm stood at Rs 2.03 lakh crore. Total 6.26 lakh shares changed hands amounting to a turnover of Rs 38.30 crore on BSE. Tata Motors stock hit a 52-week low of Rs 375.50 on December 26, 2022 and a 52 week high of Rs 634.60 on July 10,2023. The auto stock has surged 35.77% in a year and gained 55% in 2023. It has zoomed 475.38% in three years.
In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 67.5, signaling it's trading neither in the overbought nor in the oversold zone. Tata Motors stock has a one-year beta of 1.1, indicating high volatility during the period. Tata Motors shares are trading higher than the 20 day, 50 day, 100 day and 200 day but lower than the 5 day and 10 day moving averages.
Here’s a look at what analysts said on the outlook of the stock.
Abhijeet from Tips2trades said, "Tata Motors stock price is bearish on the Daily charts with a strong resistance at Rs 635. A daily close below the support of Rs 592 could lead to Rs 560 in the near term."
Kotak Institutional Equities has downgraded Tata Motors to sell from reduce. The brokerage has revised the revised target price to Rs 550 from Rs 530 a share.
Kotak said that Tata Motors' market share will fall by 50 basis points (bps) year-on-year in FY2024, primarily because of heightened competition in the micro-SUV segment, where Maruti Suzuki Fronx and Hyundai Exter are likely to intensify the competition. However, this fall will partly be offset by gains in the hatchback segment, resulting from the introduction of CNG and EV trims for existing models.
Brokerage Sharekhan is bullish on Tata Motors. It has assigned a buy rating on the stock with a target price of Rs 720 in its research report dated July 10, 2023.
In Q1 of the current fiscal, JLR logged a robust 29.9% y-o-y rise in volumes and may report a positive FCF of over GBP 400 mn. JLR continues to enjoy strong demand reflected in the order book of 185,000 units. The demand for JLR’s most profitable models has been strong as 76% as its order book constitutes Range Rover, Range Rover Sport and Defender.
“We maintain a Buy with revised price target of Rs 720 in expectation of continued improvement in JLR, PV and CV business along with reduction in net automotive debt from current levels,” said Sharekhan.