Posted on February 28, 2025, by Niftynews
Tata Motors Stock, the leading Indian automobile manufacturer and parent company of Jaguar Land Rover (JLR), are facing a tough period in the market, with the stock on track for its worst monthly performance in 10 years. As of February 28, 2025, the company’s stock has hit a 52-week low, falling for five consecutive days, and has seen a 46% decline from its July 2024 peak of ₹1,179 per share.
In February, Tata Motors lost 12% of its value, marking its seventh consecutive negative monthly return. The company’s market capitalization has dropped by nearly ₹2 lakh crore since last year, causing concern among investors. Despite these setbacks, several analysts continue to hold a positive outlook, with some even projecting that the stock will recover and surpass ₹1,000.
Tata Motors Stock Decline: The Key Reasons
The decline in Tata Motors stock is primarily driven by broader market challenges and sector-specific concerns. In 2023, Tata Motors was one of the best-performing stocks on the Nifty 50 index, doubling in value. However, after hitting a high of ₹1,179 in July 2024, the stock has been on a steady downtrend, losing nearly 46% of its value.
Several factors have contributed to the stock fall:
- Global Market Volatility: Economic uncertainty, particularly in the US and Europe, has affected the performance of automakers worldwide, including Tata Motors. Rising interest rates and inflation concerns have led to lower consumer demand for high-ticket items like cars and SUVs.
- Challenges at Jaguar Land Rover: While JLR continues to be a key revenue driver for Tata Motors, the company has faced challenges related to supply chain disruptions and lower-than-expected demand for luxury vehicles in certain regions.
- Rising Raw Material Costs: The automobile industry has been dealing with higher raw material costs, such as steel and aluminum, which have hurt profit margins.
- Geopolitical Tensions: Ongoing geopolitical issues like trade tensions and supply chain concerns have added to the pressure on Tata Motors stock.
Despite these challenges, Tata Motors’ long-term outlook remains positive, thanks to its strong position in both the domestic and international markets, along with a focus on electric vehicles (EVs) and sustainability.
Tata Motors Stock: Oversold Conditions and Analyst Recommendations
On the technical side, is showing oversold conditions. As of February 2025, the stock trades below its 50-day, 100-day, and 200-day moving averages, signaling weak momentum. Additionally, the Relative Strength Index (RSI) has fallen to 28, which is considered in the “oversold” zone (RSI below 30).
However, despite this technical weakness, analysts remain optimistic about the stock’s potential. Out of 34 analysts covering Tata Motors, 20 analysts have a “buy” rating on the stock, 9 recommend a “hold”, and 5 suggest a “sell”. This reflects a strong consensus on the stock’s future upside, with many seeing it as undervalued.
Price Target Projections for Tata Motors: Can It Surpass ₹1,000?
Several analysts are still confident that Tata Motors will rebound and surpass ₹1,000 per share in the near future:
- Haitong Securities has set a price target of ₹1,300, implying that the stock could nearly double from its current level.
- Axis Capital and Reliance Securities both have price targets of ₹1,100 for Tata Motors, suggesting significant upside potential.
- The consensus price target indicates a 32% upside from current levels.
Despite the recent volatility, analysts remain bullish on the stock due to Tata Motors strong long-term growth prospects, including its push into electric vehicles (EVs) and the ongoing recovery of JLR.
What’s Next for Tata Motors? Will the Stock Recover?
Tata Motors stock performance in the next few months will likely depend on several factors:
- Domestic Growth in India: Tata Motors is well-positioned in the Indian market, with strong demand for its passenger vehicles and commercial vehicles. The government’s push towards sustainability and EV adoption is expected to benefit the company’s future growth prospects.
- JLR’s Recovery: The company will need to overcome the current challenges at Jaguar Land Rover. The brand’s performance in the luxury SUV market and new models, especially in electric vehicles (EVs), will be critical for Tata Motors revenue growth.
- Rising EV Demand: Tata Motors has made significant strides in the electric vehicle market, with models like the Tata Nexon EV gaining popularity. The growing demand for EVs in both domestic and international markets will likely support Tata Motors long-term growth.
- Cost Management: The company will need to manage rising raw material costs and optimize its operations to maintain healthy margins.
Conclusion: Should Investors Buy Tata Motors?
Despite a challenging 2024 and early 2025, Tata Motors stock remains an attractive long-term investment for those who believe in the company’s growth potential, especially in the electric vehicle sector. The stock’s current oversold conditions and analysts’ bullish price targets suggest that there may be a significant upside from current levels.
If Tata Motors can navigate the challenges it faces and capitalize on EV growth, it could be poised for a rebound in the latter half of 2025. However, investors should remain cautious and monitor the company’s performance closely, especially in light of the broader economic conditions and developments at Jaguar Land Rover.
Key Takeaways:
- Tata Motors shares have fallen 46% from their July 2024 peak and are on track for their worst monthly losing streak in 10 years.
- Despite the sharp decline, analysts remain optimistic, with 20 analysts rating the stock as a “buy” and predicting an upside potential of 32%.
- Haitong Securities has a target of ₹1,300 for the stock, signaling the possibility of a near 100% upside from current levels.
- Tata Motors focus on electric vehicles (EVs) and Jaguar Land Rover recovery are crucial for the stock’s future growth.
