scorecardresearch
Tata Motors stock plunges 25% from January high; Should you buy the dip?

Tata Motors stock plunges 25% from January high; Should you buy the dip?

Shares of Tata Motors, which hit an intraday high of Rs 528.35 on January 18, 2022, is currently trading at Rs 393.20, translating into a decline of 25.57 per cent during the period.

Tata Motors shares are trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Tata Motors shares are trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

Shares of Tata Motors have plunged 25 per cent in nearly five months amid highly volatile domestic and global markets hit by the coronavirus-induced slowdown and the ongoing Russia-Ukraine war.

The stock, which hit an intraday high of Rs 528.35 on January 18, 2022 is currently trading at Rs 393.20, translating into a decline of 25.57 per cent during the period.

The large cap stock touched an intraday high of Rs 397.30 on BSE today.

Tata Motors shares are trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Total 8.84 lakh shares of the firm changed hands amounting to a turnover of Rs 34.83 crore on BSE. The market cap of the firm stood at Rs 1.30 lakh crore on BSE.

The stock hit a 52-week high of Rs 536.50 on November 17,2021 and a 52-week low of Rs 268.50 on August 24, 2021.

Brokerage CLSA has assigned an outperform rating to the stock but reduced its target price to Rs 453 against the earlier target of Rs 480.

Share Market update: Sensex falls 709 pts, Nifty below 15,450; Tata Steel, Wipro top losers

CLSA has trimmed volume estimates for both JLR and the commercial vehicle business. The stock is valuing JLR at 0.5 times price to book value. The debt is likely to come down as free cashflow improves, CLSA said. A decline in JLR volumes is likely to continue as chip shortage and supply chain bottlenecks continue in CY22, the brokerage added.

ICICI Securities has assigned a buy call to the stock with a target price of Rs 680 for one year. The target price is 1.9 times JLR/13 times standalone FY24E EV/EBITDA.

In an earnings update on May 28, Geojit downgraded its rating to hold.

"Demand remains strong despite geopolitical, and inflation concerns. However, the supply to be constrained by the semiconductor shortage and thereby margins to remain under pressure due to elevated levels of inflation in the short to medium term. On a cautious outlook, we downgrade our rating on the stock to HOLD with a rolled forward target of Rs 475 based on SOTP," Geojit said.

ALSO READ: Tata Motors to deliver 10,000 EVs to BluSmart Electric Mobility

The automaker reported narrowing of net loss to Rs 1,032.84 crore for the quarter ended 31 March, 2022 against net loss of Rs 7,605.40 crore a year earlier.

Sequentially, the automaker's loss narrowed from Rs 1,516.14 crore in the December quarter (Q3FY22). However, consolidated total revenue from operations fell nearly 11.4 per cent to Rs 78,439.06 crore versus Rs 88,627.90 crore from a year ago.

The company's earnings before interest, taxes, depreciation, and amortisation or EBIDTA margin in Q4 came in at 11.2 per cent, down 320 basis points. EBIT margin at 3.2 per cent fell 410 basis points.