Tata Motors Stock Slips 5% As USB Securities Issues Target Price To Rs 825

The stock price of Tata Motors plunged more than 5 per cent in the Wednesday trading session after the brokerage firm, UBS Securities maintained its ‘sell’ recommendation on Tata Motors with the target price of Rs 825.

Stocks of Tata Motors slipped below Rs 1,000 to Rs 980 with 5.3 per cent dip in the morning session on the National Stock Exchange (NSE). 

USB Securities cited that there is more downside risk due to margin slippage at the company's luxury division, Jaguar Land Rover, as well as within the domestic passenger vehicle category. 

The brokerage also cautioned that JLR's premium models, Defender, Range Rover, and Range Rover Sport have begun to moderate after a long and successful run. The orderbook for this trio has now returned to pre-covid levels, and it is anticipated that Range Rover discount will increase shortly.

The firm said in a note, “The question is should investors worry with JLR discounts spike.”
 

Since Tata Motors' average selling price has increased due to the high sales of JLR's premium models, worries about a slowdown in demand could have an effect on the company's margin performance.

As a part of its ‘Festival of Cars’ campaign, the carmaker began offering considerable price discounts on a variety of electric vehicle (EV) models on 10 September. 

The offer is only available until 31 October and is intended to increase EV adoption in India by lowering their cost. Tata Motors said in a statement that this action will contribute to ‘mainstreaming’ electric vehicles throughout the nation.
 

Customers will also receive six months of free charging at more than 5,500 Tata Power stations nationwide as a further incentive, making inter- and intra-city travel hassle-free and cost-free.

In terms of stock performance, Tata Motors increased nearly 25 per cent in 2024 so far compared to sectoral index, Nifty Auto and benchmark index, Nifty returns of 35 per cent and 15 per cent respectively.