Stock Tumbles 46% From Peak as Market Pressure Weighs on Auto Giant
Shares of Tata Motors nosedived 4% on March 1, hitting a 52-week low of ₹623 as market-wide selling intensified. The stock has been in a prolonged downturn, marking its seventh consecutive month in the red—its longest losing streak since 2015.
The continued slide follows disappointing Q3 results, cautious management guidance, and ongoing market correction pressures. The broader downturn has significantly impacted Tata Motors, leading to a 46% decline from its July 30 peak of ₹1,179 and erasing nearly ₹2 lakh crore in market capitalization since then.
Tata Motors’ Declining Streak: A Historic Downtrend
- Fifth consecutive session of decline, falling in seven of the last eight trading days.
- Stock down nearly 12% in February, its worst month since October 2024, when it fell 14%.
- Seven-month losing streak, the longest since 2015, when the stock fell for the same period before staging a recovery.
Despite this prolonged weakness, global brokerage firm CLSA has upgraded Tata Motors to a high-conviction ‘outperform’ rating, citing undervalued Jaguar Land Rover (JLR) business and cyclical recovery prospects.
CLSA Sees Buying Opportunity Despite Weak Near-Term Outlook
International brokerage CLSA believes Tata Motors presents an attractive entry point for investors willing to weather short-term volatility.
- Jaguar Land Rover (JLR) is currently trading at 1.2x FY27 EV/EBITDA, significantly lower than its normative multiple of 2.5x.
- JLR’s per-share valuation stands at ₹320, while CLSA’s target valuation is ₹450 in a sum-of-the-parts analysis.
- A potential cyclical recovery in the medium and heavy commercial vehicle (M&HCV) segment from FY27 could bolster the stock’s future prospects.
However, CLSA also cautioned about risks related to US tariff hikes, weaker-than-expected demand, and margin pressures.
Weak Q3 Performance Adds to Market Concerns
Tata Motors’ recent Q3 FY25 earnings have failed to impress investors, further weighing down the stock.
- Consolidated net profit fell 22% YoY to ₹5,451 crore, missing analyst expectations.
- Revenue from operations grew by 2.7% YoY to ₹1,13,575 crore, driven by modest sales improvement.
- Jaguar Land Rover (JLR) posted a 4.3% revenue decline to ₹12,354 crore, affected by subdued demand.
- EBITDA margin improved by 120 basis points to 7.8%, supported by cost-cutting initiatives and PLI incentives.
- Electric vehicle (EV) sales in the personal segment rose 19% YoY, but fleet sales were impacted by the expiry of FAME II subsidies.
Market Sentiment and Future Outlook
At 2:45 PM on March 1, Tata Motors shares were trading at ₹625, down 3.56% on the NSE.
Highlights for Investor:
- Short-term weakness remains, with ongoing market corrections and underwhelming earnings.
- CLSA sees long-term potential, with JLR trading at undervalued levels.
- EV growth remains strong, but fleet sales are impacted by regulatory changes.
- M&HCV recovery from FY27 could be a future catalyst.
Tata Motors’ ability to stabilize margins, navigate global headwinds, and sustain demand in its key business segments will be crucial in determining when the stock finds a bottom and recovers from its multi-month decline.
