Tata Motors shares down 26% in 6 months; is there a strong uptick ahead?

Shares of Tata Motors were last seen trading 0.22 per cent lower at Rs 711.80 in Tuesday's trade. At the mentioned price, the stock has tumbled 26.12 per cent in six months. Around 3.71 lakh shares changed hands on BSE at the time of publishing this story. The figure was lower than the two-week average volume of 6.74 lakh shares. Turnover on the counter came at Rs 26.58 crore, commanding a market capitalisation (m-cap) of Rs 2,61,898.21 crore.

A few analysts stayed positive on the counter, underscoring that it is poised for a good bounce back. Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, picked Tata Motors shares as his top picks from the large-cap space.

"The stock has been beaten blue and black all through. With the rate cuts in Europe and China's JLR (Jaguar Land Rover) sales picking up, it is poised for a good bounce back. It is looking attractive at current levels. An upmove of 20-25 per cent is on the cards based on the upcoming fourth quarter (Q4 FY25) results." he told Business Today. The automaker attracts around 67 per cent of its revenues from JLR while JLR gets nearly 27 per cent volumes from China.

"The stock has seen traction from extremely oversold parameters and is placed in a comfortable zone from a risk-reward point of view. Given these factors, it is anticipated to continue its upward trajectory in the upcoming weeks. The subzone of Rs 650 is likely to cushion any shortcomings in the near period. Conversely, sustainable buying beyond the Rs 725 zone could provide fresh momentum in the counter, resembling a counter trend for higher potential targets around Rs 770-800 levels in the near future," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Tata Motors is showing a strong V-shaped recovery from the oversold levels of Rs 670. Key resistance levels are observed at Rs 760 and Rs 780, and a breakout above these could drive momentum toward Rs 830 and beyond in the mid-term. The overall view remains positive as long as the stock sustains above Rs 670, which now acts as a crucial support level. A breach below this could invalidate the bullish outlook," said Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst at StoxBox.

The counter traded higher than the 5-day, 10-, 20-, 30-day and 50-day simple moving averages (SMAs) but lower than the 100-day, 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 63.41. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The stock has a price-to-equity (P/E) ratio of 42.29 against a price-to-book (P/B) value of 8.56. Earnings per share (EPS) stood at 16.84 with a return on equity (RoE) of 20.24. According to Trendlyne data, Tata Motors has a one-year beta of 1.2, indicating high volatility.

As of December 2024, promoters held a 42.58 per cent stake in the home-grown carmaker.