Tata Motors’ stock has witnessed a significant downturn, marking its worst monthly losing streak in a decade. The stock has dropped 47% from its peak of ₹1,179, making it the steepest decline for Tata Motors since 2015. Despite this major pullback, some analysts remain optimistic about its recovery, with price targets suggesting that the stock could once again trade above ₹1,000.
Tata Motors: From Top Gainer to Sharp Correction
Tata Motors emerged as the best-performing stock on the Nifty 50 index in 2023, doubling in value while no other stock on the index achieved the same feat. However, in 2024, the trend has reversed, leading to a major price correction.
Why is Tata Motors’ Share Price Falling?
Several factors have contributed to the recent slump in Tata Motors’ share price, including:
- Declining Sales Figures: Tata Motors’ total domestic sales in February 2024 fell 9% year-on-year, with total units sold at 77,232, compared to 86,406 in February 2023.
- Market Volatility: The broader stock market has seen fluctuations, impacting the auto sector, including Tata Motors.
- Profit Booking: After a stellar rally in 2023, many investors may have locked in profits, leading to further declines.
Analyst Predictions: Will Tata Motors Stock Rebound?
Despite the sharp drop, three analysts out of 34 covering Tata Motors still expect the stock to cross ₹1,000. Some of the key brokerage targets include:
- Haitong Securities has set the highest target of ₹1,300, indicating that Tata Motors shares could almost double from current levels.
- Axis Capital and Reliance Securities have price targets of ₹1,100 each, reflecting strong confidence in a potential comeback.
- Motilal Oswal, however, has maintained a Neutral stance, setting a conservative price target of ₹755.
What Should Investors Do?
Tata Motors’ stock correction might raise concerns among short-term investors, but some analysts believe this could be a temporary downturn. With strong growth prospects in the electric vehicle (EV) segment, commercial vehicles, and passenger cars, the company has the potential to stage a comeback.
Investors should closely track future sales numbers, earnings reports, and market trends before making any investment decisions. While some analysts foresee a strong recovery, market volatility in the auto sector suggests that caution is still advisable.
