'Factually incorrect': Tata Motors clarifies on 'Holdco to house demerger biz' report; stock down 34% from record high

Tata Motors Ltd has issued its clarification over a news report titled "Holdco to house Tata Motors' demerged CV, PV Businesses" and called it "factually incorrect." The homegrown automaker said, "It is observed that sections of the media have reported on the above without any basis. The said demerger is being done through a composite scheme of arrangements to be approved by NCLT, the process for which is already underway. Appropriate notifications have been duly filed with the stock exchanges and are in the public domain. It is to be noted, that there is no reference to any holding company in the scheme or the notifications filed."

On the stock-specific front, Tata Motors shares slipped 1.55 per cent on Thursday to settle at Rs 774.25. At this closing price, the stock has declined 34.33 per cent from its all-time high of Rs 1,179.05, a level seen on July 30, 2024.

The carmaker reported a 9.9 per cent year-on-year (YoY) drop in its consolidated net profit for the second quarter ended September 2024 (Q2 FY25). During the quarter under review, profit came at Rs 3,450 crore as against Rs 3,832 crore in the year-ago period.

Its consolidated revenue from operations stood at Rs 1,00,534 crore compared to Rs 1,04,444 crore in the corresponding period last year. Looking forward, Tata Motors expects an all-round improvement in performance in H2 FY25 and the business to become net debt free by this year.

Atul Parakh, CEO of Bigul, said the stock has shown resilience despite facing challenging market conditions. "While the company experienced temporary setbacks, including supply constraints affecting JLR (Jaguar Land Rover) performance and reduced commercial vehicle revenues, it has maintained strong business fundamentals. The company's strategic focus on cost optimisation and pricing strategies has helped maintain profitability, particularly in the CV segment where EBITDA margins improved to 10.8 per cent," Parakh stated.

Technically, the stock looked 'bearish' on daily charts for the near term. Support could be seen at Rs 760 level.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Tata Motors has seen a significant correction. There has been no sign of respite from the selling in the counter as it continues to slip lower. The stock has been in extremely oversold terrain. One must stay on the sidelines and avoid catching the falling knife. Wait for a conclusive breather and reversal to accumulate the counter."

Sebi-registered research analyst AR Ramachandran said the counter looked bearish but also oversold on daily charts.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi, said immediate support will be at Rs 760 level and resistance Rs 813.

Meanwhile, domestic benchmarks remained closed today on account of "Guru Nanak Jayanti." Indices will reopen on Monday (November 18).