Tata Motors shares plunged 17% from record high levels; will the stock fall further?

Tata Motors Ltd shares continued their downward trend in Wednesday's trading session and slipped below the psychological Rs 1,000 mark. The stock dived 5.83 per cent to hit a day low of Rs 975.05. At this price, it has declined 17.30 per cent from its all-time high value of Rs 1,179.05, a level seen on July 30, 2024.

The scrip saw heavy trading volume on BSE as around 13.50 lakh shares were seen changing hands today. The figure was over thrice the two-week average volume of 4.23 lakh shares. Turnover on the counter came at Rs 133.23 crore, commanding a market capitalisation (m-cap) of Rs 3,61,343.94 crore.

Global brokerage UBS maintained its 'Sell' call on the stock with a target of Rs 825 per share. "With JLR's order backlog already below pre-Covid and incremental bookings lagging supply, we would not be surprised if the incentives for Range Rover—JLR's apex model— start rising soon from near-zero levels. Rising discounts, moderating growth and a lack of any new ICE/hybrid launch could result in significantly weaker financials for FY26, even if consensus extrapolates the last two years' results," UBS analysts said.

"Tata Motors shares have been in a consolidation phase after touching all-time highs. One of the key concerns for auto OEMs in the medium- to short-term is the increase in inventories with dealerships which can create some margin impact," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"The carmaker has been one of the front runners in the EV space. The listing of Hyundai Motors in the coming months will give more visibility for the OEM space. It will be interesting to see how the valuations look in comparison. Investors with a long-term view can continue to hold on to the stock for a medium- to long-term," Bathini added.

Hyundai Motor India (HMIL), the country's second-largest passenger carmaker, is gearing up for an initial public offering (IPO). And, Tata Motors is India's third-largest automaker.

Technically, support on the counter could be seen at Rs 975, followed by 960, 950 and Rs 940 levels.

"Tata Motors has undergone some correction in the last couple of trading sessions. The follow-up sell-off ignites further weakness in the counter. The intermediate support lies around the Rs 980-960 subzone, followed by the Rs 940-odd zone. On the higher end, the Rs 1010-1030 range should now be seen as a sturdy hurdle in the comparable period," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"The stock looked weak on daily charts and can slip towards Rs 950 level in the near term. Investors can 'buy-on-dip' around Rs 920 for an upside target of Rs 1,000," said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.

"Tata Motors stock price is bearish but also slightly oversold on daily charts with strong resistance at Rs 1,035. A daily close below support of Rs 975 could lead to a fall towards Rs 948 level in the near term," said Sebi-registered research analyst AR Ramachandran.

The stock is indicating a negative trend for the short term, said Rupak De, Senior Technical Analyst at LKP Securities.

As of September 1, 2024, promoters held a 41.86 per cent stake in the Tata Group firm.