Shares of Tata Motors on Monday resumed fall after a single-day halt. The stock slipped 4.06 per cent to close at Rs 843.05. At this price, it has declined 28.50 per cent from its all-time high of Rs 1,179.05, a level seen on July 30, 2024. On a year-to-date (YTD) basis, the scrip has climbed 6.65 per cent as against an 11.20 per cent rise in benchmark BSE Sensex.
In terms of sales, the carmaker reported a 12 per cent decline during the September 2024 quarter (Q2 FY25), at 2,15,034 units, as against 2,43,024 units in the year-ago period. Tata Motors is scheduled to declare its second-quarter earnings on November 8.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said the stock has been facing selling pressure due to soft auto sales. "Investors with a longer-term horizon can hold on to Tata Motors as China's stimulus package could have a positive impact on JLR (Jaguar Land Rover) sales," the market expert mentioned. The automaker attracts around 67 per cent of its revenues from JLR while JLR gets near 27 per cent volumes from China.
Technically, support on the counter could be seen around Rs 800 levels. With that being said, an analyst recommended not to bottom-fish at current levels.
Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Tata Motors has experienced a significant decline from its peak. The short-term market structure indicates considerable instability, with crucial support seen around Rs 800 sublevels. Meanwhile, the 920-940 range represents a formidable obstacle for the stock. Achieving a decisive break above this level could potentially reignite positive momentum and investor confidence in the company."
Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi, said, "Support will be Rs 800 and resistance at Rs 887. A decisive move above Rs 887 level may trigger a further upside towards Rs 920. The expected trading range will be between Rs 800 and Rs 920 for the short term."
Kushal Gandhi, Technical Analyst, StoxBox, said, "The current price structure is characterized by a formation of lower highs with no indications of recovery. We advise against bottom fishing the stock at its current valuations."
The scrip traded lower than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 27.42. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the stock has a price-to-equity (P/E) ratio of 30.55 against a price-to-book (P/B) value of 10.29. Earnings per share (EPS) stood at 27.59 with a return on equity (RoE) of 33.69. Promoters held a 42.58 per cent stake in Tata Motors during the September 2024 quarter.