Tata Motors shares turn red a day after scaling record high

Shares of Tata Motors Ltd slumped over a percent today a day after scaling record high. The auto stock turned red after global brokerage CLSA downgraded the Tata Group stock to outperform from the earlier buy call. Tata Motors shares fell 1.46% to Rs 943.10 against the previous close of Rs 957.75 on BSE. Market cap of the firm fell to Rs 3.15 lakh crore.

The brokerage cited the recent sharp run-up in stock price behind the downgrade. However, the global brokerage is bullish on the automaker's growth prospects. It assigned a price target of Rs 1,061 to the stock, 11 percent upside to the previous close of Rs 957.75 on BSE.

Shares of Tata Motors hit a record high of Rs 976.30 on February 28.

Tata Motors stock has surged 20% this year and rallied 125% in the last one year.

The brokerage mentioned robust volume growth clocked by the Tata Motors luxury arm. Jaguar Land Rover reported a 14.5 percent year-on-year rise in retail volumes in January.

CLSA said it expects volumes in Q4 to surpass those in Q3. In the current session, around 1.83 lakh shares changed hands amounting to a turnover of Rs 17.43 crore today. Market cap of the firm stood at Rs 3.15 lakh crore.

Tata Motors stock has a one-year beta of 0.4, indicating very low volatility during the period.

Prabhudas Lilladher has reiterated a target price of Rs 1,010 citing the volume ramp-up in the third quarter. Tata Motors had an advantage of volume ramp-up, good order book and a rich mix of higher ASP models. Lower CV discounts also helped margins in the third quarter, it said.

In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 72.3, signaling it's trading in the overbought zone. Tata Motors shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has risen 142% from its 52-week low. Tata Motors stock hit a 52-week low of Rs 400.40 on March 28, 2023.