Tata Motors shares hit fresh 52-week low; is there more pain left?

Tata Motors Ltd shares continued their losing run for the sixth consecutive session in Monday's trade. The stock fell 2.31 per cent to hit a new one-year low value of Rs 606.20. It was last seen trading 0.45 per cent down at Rs 617.75, crashing 43.09 per cent in the last six months.

In February, the company's domestic sales dropped 9 per cent, year-on-year (YoY), to 46,435 units from 51,267 units in the year-ago period. Electric vehicle (EV) sales fell 23 per cent YoY to 5,343 units.

A market expert said Tata Motors' stock could fall further in the short term. On the other hand, some suggested that the carmaker's long-term story remains intact.

"Tata's EVs are mounted on the regular ICE (internal combustion engine) platform, which is why a few car rental companies are staying away. I think Tata Motors could continue to be an underperformer and the stock can slip towards Rs 550-575 levels," Vinit Bolinjkar, Head of Research at Ventura Securities, told Business Today TV.

"Tata Motors is facing short-term headwinds after the listing of Hyundai Motor and Mahindra's new vehicle launches. Also, the slowdown in China is impacting its Jaguar Land Rover (JLR) sales. Investors with a long-term view can continue to hold on to the stock. Tesla's expected entry will not create an overhang or disruption for Tata Motors as the US-based firm's pricing segment is higher than the present players in the Indian market," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities. The automaker attracts around 67 per cent of its revenues from JLR while JLR gets nearly 27 per cent volumes from China.

"Despite the short-term market volatility, the company's fundamentals suggest it is undervalued and could offer significant returns over the long term. However, investors should consider broader market conditions before making investment decisions," said Atul Parakh, CEO at Bigul.

Technically, the counter traded lower than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 26.17. 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 36.75 against a price-to-book (P/B) value of 7.44. Earnings per share (EPS) stood at 16.84 with a return on equity (RoE) of 20.24.

As of December 2024, promoters held a 42.58 per cent stake in the company.