Tata Motors Shares Tumble 4%, Hit 52-Week Low Amid Prolonged Selloff

Shares of Tata Motors nosedived 4% on February 28, hitting a 52-week low of ₹623, as the stock continued its seventh consecutive month of decline, the longest losing streak since 2015.

Market Performance: Stock on a Downward Spiral

Tata Motors’ stock has been on a continuous downtrend, falling in seven of the last eight trading sessions. The February decline stands at nearly 12%, making it the worst-performing month since October 2024, when it lost 14%.

The stock has plummeted 46% from its July 30 peak of ₹1,179, wiping out nearly ₹2 lakh crore in market capitalization.

Why Is Tata Motors Falling?

The latest selloff in Tata Motors stock is driven by multiple factors:

1. Weak Q3 Performance & Cautious Outlook

   • The company’s third-quarter earnings failed to impress investors, leading to concerns over its near-term growth trajectory.
   • Management’s conservative guidance on future performance has added to the negative sentiment.

2. Broader Market Selloff

   • The Indian stock market has witnessed a correction, putting additional pressure on Tata Motors, which is sensitive to broader market movements.

3. Jaguar Land Rover (JLR) Concerns

   • Tata Motors’ Jaguar Land Rover (JLR) business has been facing pricing pressures and uncertainty over global demand.
   • Rising concerns about potential US tariff hikes and weaker-than-expected demand for luxury vehicles have impacted investor sentiment.

Brokerage View: CLSA Sees an Opportunity

Despite the sharp decline, global brokerage CLSA remains optimistic about Tata Motors' long-term prospects.

• CLSA upgraded Tata Motors to a "high-conviction outperform" from "outperform."
• The brokerage sees the current price as an attractive entry point despite near-term headwinds.
• CLSA values JLR at 1.2x FY27 EV/EBITDA, well below its historical multiple of 2.5x, making it undervalued at the current stock price.

At the current valuation:

• JLR’s implied per-share value is ₹320, whereas CLSA’s sum-of-the-parts analysis estimates a target valuation of ₹450.
• This offers a cushion against risks like US tariff hikes and margin pressures.
• CLSA also expects a cyclical recovery in the medium and heavy commercial vehicle segment from FY27, which could further aid Tata Motors.

Outlook: What’s Next for Tata Motors?

Tata Motors has been under significant selling pressure, but analysts believe:
✅ The long-term fundamentals remain strong.
✅ The stock is undervalued relative to its historical multiples.
✅ A recovery in the commercial vehicle segment could act as a catalyst from FY27.

For now, investors will closely watch:

• Further market movements and global macroeconomic conditions.
• How Tata Motors navigates JLR’s challenges and upcoming demand trends.
• Any updates on policy changes, such as potential US tariffs affecting luxury car exports.

Conclusion

Tata Motors' 52-week low reflects short-term concerns, but analysts like CLSA see an attractive buying opportunity at these levels. With the stock down 46% from its peak, value investors may start considering entry points, especially if long-term growth levers such as a commercial vehicle recovery and JLR valuation uptick play out in the coming years.

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