The earnings miss, marked by a steep drop in EBITDA and pre-exceptional PBT, has further eroded market confidence. Global operations, particularly Jaguar Land Rover (JLR), are grappling with higher costs, tariffs, and slowing demand in key markets, while the India PV business is facing margin pressures and declining market share.
Against this backdrop, brokerages and technical experts are assessing whether Tata Motors’ steep fall presents a buying opportunity or signals the potential for deeper declines. Here’s how leading analysts view the stock:
Jefferies
Global brokerage firm Jefferies flagged a “big miss” in Tata Motors’ Q1 results, citing multiple headwinds across business segments. It noted that Q1 EBITDA and pre-exceptional PBT fell 37–41% year-on-year, coming in 13–22% below its estimates.
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Key concerns include:
– Jaguar Land Rover (JLR): Facing increased competition and consumption tax in China, higher warranty costs, and the costs of the battery electric vehicle (BEV) transition.– India PV (Passenger Vehicles): Market share is slipping and margins remain under pressure.
– CV (Commercial Vehicles): Demand remains weak.
– Financial performance: Q1 EBITDA margin contracted by 6.5 percentage points to 9.3%, with JLR wholesales down 11% YoY and India PV volumes down 10% YoY.
Jefferies cut its FY26–28 earnings per share (EPS) estimates by 8–15% and reiterated its Underperform rating with a target price of Rs 550, also expressing caution over the Iveco acquisition.
Jigar S Patel, Senior Manager – Technical Research Analyst, Anand Rathi Shares and Stock Brokers
Patel notes that Tata Motors is currently trading below its 50-, 100-, and 200-day exponential moving averages (DEMAs), reflecting a weak technical structure and prevailing bearish sentiment.
However, the past two sessions have seen buying volumes emerging from lower levels, indicating potential accumulation. The Relative Strength Index (RSI) is also displaying an impulsive upward pattern, suggesting strengthening momentum.
Patel adds that this combination raises the possibility of a short-term bounce, but for a sustained recovery, the stock must reclaim and hold above these moving averages. He advises traders to wait for confirmation signals before taking aggressive long positions.
Ajit Mishra, SVP – Research, Religare Broking
Mishra observes that Tata Motors is trading close to a crucial support zone of Rs 640-Rs 650, which aligns with its 200 EMA on the weekly chart. The stock had earlier staged a sharp rally post a breakout from a fresh base but lost steam near the Rs 850–Rs 900 range, forming a distribution pattern.
Following the breakdown from the “shorting pivot,” the medium-term bias turned bearish, with prices slipping below both the 20 EMA and 50 EMA, indicating sustained selling pressure.
Momentum oscillators have cooled from overbought levels, while subdued volumes point to weak buying interest. Mishra warns that a decisive close below Rs 640 could open the door for further downside toward the Rs 600-Rs 550 range. On the upside, Rs 700-Rs 720 is seen as a stiff hurdle; only a breakout above this level, backed by volumes, could revive bullish sentiment.
Until then, he maintains a “sell-on-rise” approach for the short term.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)