Tata Motors sales dip in July; shares trade near 52-week high. Analyst views

Tata Motors' sales in the domestic and international market for July 2023 stood at 80,633 vehicles, a fall of 1.4 per cent as compared to 81,790 units during July last year. Domestic sales for the said month came at 78,844 against 78,978 vehicles in July 2022, the carmaker stated in a release on Tuesday.

Overall, the numbers were largely in line with electric vehicle (EVs) continuing to aid passenger vehicle (PV) growth, said Himanshu Singh, Research Analyst at Prabhudas Lilladher. "Heavy trucks and buses continue to see good growth, while LCVs (Light commercial vehicles) decline. EV (Total) grew year-on-year (YoY) by 52.5 per cent to 6,329 units, contracted month-on-month (MoM) by 9.9 per cent. EV penetration (percentage) expanded YoY by 456 basis points (bps) to 13.3 per cent, contracted MoM by 156 bps," he stated.

The stock today rose 1.37 per cent to hit a day high of Rs 652.90. At today's high price, the scrip was just 1.86 per cent away from its 52-week high of Rs 665.30, a level seen on July 26, 2023.

On the earnings front, the Mumbai-based company posted a consolidated net profit of Rs 3,203 crore for the April-June quarter, compared with a year-ago loss of Rs 5,007 crore. Its UK-based Jaguar Land Rover (JLR) unit, which accounted for 70 per cent of Tata Motors' revenue, benefited from strong demand for its higher-margin SUVs and an improving supply of semiconductors after crippling shortages for several quarters.

JLR logged its highest production levels in nine quarters in April-June, while strong retail sales led to a 66 per cent surge in revenue.

Here's what technical analysts said:

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "Tata Motors has seen a strong move in the recent period and is hovering at its 52-week highs on the technical charts. The stock has entered an overbought region on technical parameters and post such a strong stellar run, one should not rule out the possibility of profit booking. However, the undertone remains buoyant till it sustains above the immediate support zone of Rs 600-580-odd levels and one needs to adopt an approach to buy the declines in the counter."

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock overall is in an uptrend with bias maintained strong and with a short dip witnessed has near term support near Rs 625 levels where it can sustain and anticipate for a reversal with resistance zone near Rs 660 levels. Further a decisive move past Rs 660 can trigger for a fresh breakout for next targets of Rs 690-700 levels."

Ganesh Dongre, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Traders can book some profit and can re-enter in this stock at a possible near support level of Rs 605-615 with the stop loss placed at Rs 580."

AR Ramachandran from Tips2trades said, "Tata motors stock price is bearish and overbought on the Daily charts with next resistance at Rs 649. Investors should book profits at current levels and wait for a dip near Daily support of Rs 545 to buy for better returns. Immediate support will be at Rs 626."

Ravi Singh, Vice-President and Head of Research at Share India, said, "The stock can hit the lower levels of Rs 630 in near-term."

Vaibhav Kaushik, Research Analyst at GCL Broking, said, "After Tata Motors DVR's delisting update, the stock was under short-term correction mode. It has a good support near Rs 588 level. So, keep buying on dips with a stop loss placed at Rs 588. Expected target would be Rs 700."

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