Tata Motors shares – Tata Motors shares hit 52-week low, what should investors do?

Shares of Tata Motors hit a 52-week low on Monday amid weakness in the broader market. Tata Motors stock slipped 1% to Rs 666 against the previous close of Rs 672.90 on BSE.  Market cap of the Tata Group firm stood at Rs 2.48 lakh crore. The stock looks weak in terms of technicals as it is trading below the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages. However, Tata Motors stock is trading neither in an oversold nor in overbought zone, indicates its RSI of 37.7. The stock has a one-year beta of 1.2, indicating very high volatility during the period.

The stock hit its 52 week high of Rs 1179.05 on July 30, 2024. The stock has delivered negative returns in the short term. It has lost 38% in six months and fallen 28% in a year. 

Jigar S Patel from Anand Rathi said, “Support will be at Rs 660 and resistance at Rs 690. A decisive move above the Rs 690 level may trigger a further upside of Rs 720. The expected trading range will be between Rs 660 and Rs 720 for the short-term.”

Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox advises investors to wait and watch before making any move on the counter. 

“Tata Motors has witnessed a significant correction from its 52-week high, currently trading around ?674.10. The stock remains in a downtrend, as indicated by its position below key exponential moving averages (EMA 20/50/100/200). The RSI stands at 38.13, reflecting weak momentum, while MACD remains in negative territory at -17.80, signaling bearish sentiment. The ADX at 27.92 suggests a moderately strong trend, with the DI- above DI+, reinforcing selling pressure. Despite recent attempts to find support near ?660-670, the stock lacks bullish confirmation. The presence of a sell signal on the 10 EMA CLoud and resistance around Rs 703-718 further indicates caution. Given the current setup, Tata Motors is in a ‘no-trade zone,’ where neither strong buy nor sell signals are evident. Traders should wait for a decisive breakout above resistance or further confirmation of support before taking new positions. A ‘wait-and-watch’ approach is advised for now,” said Ranadive. 

AR Ramachandran, SEBI registered Independent analyst says, “Tata Motors is sideways to bearish on the Daily charts with strong support at Rs 666. A Daily close above the resistance of Rs 694 could lead to a target of Rs 751 in the near term.”

Incred Equities has assigned a reduce rating with a price target of Rs 661 to the Tata Motors stock. 

Tata Motors’ consolidated EBITDA in 3QFY25 fell 14% yoy but was up 6% qoq at Rs 155 bn, missing our estimate by 11% and Bloomberg consensus estimate by 3%, said Incred. 

Incred Equities is bearish on the prospects of the firm’s overseas arm JLR. 

“With tariff challenges in global trade and volatile currency movement, JLR will be vulnerable, despite its improved product mix and new vehicle launch plans. Increased competition in India’s electric car and small truck segments are a cause of concern. We maintain our REDUCE rating on Tata Motors. Key upside risks: Success of new products and demand stimulus benefits,” said Incred Equities.  

On the other hand, global brokerage CLSA has given a rating upgrade to the auto stock as it believes an adverse near-term outlook has given scope to enter the counter at favourable valuations. It has assigned an outperform rating to Tata Motors stock with a price target of Rs 930. 

Emkay Global has given a target price of Rs 950 on the stock.  Motilal Oswal has a price target of Rs 755 on the auto stock. 

“We expect margin pressure to persist at JLR over FY24-27E, given: weak demand in key regions, rising cost pressure as it invests in demand generation, and EV ramp-up, which is likely to be margin-dilutive. Even in India, both CV and PV businesses are seeing a moderation in demand. For lack of any triggers, we reiterate our Neutral rating with a Dec’26E SoTP-based target of Rs 755,” MOFSL said post Tata Motors’ Q3 results.