Tata Motors shares slip 6%, approach 52-week low; here's why  

Shares of Tata Motors Ltd slipped 6% on Friday after global brokerage CLSA downgraded the Tata Group stock and removed it  from high conviction outperform list. In the current session, Tata Motors shares fell 5.77% to Rs 615.50 on BSE. It has approached the 52 week low of Rs 606.20 reached on March 3 this year. Market cap of the Tata Group firm slipped to Rs 2.26 lakh crore. The stock has a one-year beta of 1.2, indicating very high volatility during the period.

Tata Motors stock has lost 34% in the last six months  and slipped 22% in three months. The stock has fallen 39% in a year. 

The brokerage also reduced its price target to Rs 765 against Rs 930 earlier. That amounts to a potential upside of 17% from Thursday's close.  

In a note, the global brokerage said the imposition of 25% import tariffs in the US along with the discontinuation of the Jaguar models will bring down volumes of Jaguar Land Rover (JLR) by 14% year-on-year in financial year 2026.

This could result in EBIT margins of the firm falling to 7% in financial year 2026-2027, compared to the 9% anticipated this year, due to lower scale.

Subsequently, CLSA trimmed JLR's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) estimate for financial year 2026 However the brokerage expects the firm to remain free cash flow positive in both financial year 2026 and 2027.

The brokerage also reduced JLR's target Enterprise Value-to-EBITDA multiple from 2.5x to 2x as it sees near-term growth challenges, which it believes are already priced in. At the current market price, JLR is trading at 1.1 times EV/EBITDA.

The high exposure of JLR makes US a key market for Tata Motors. JLR sold over 4 lakh units globally in FY24, of which about 23 percent were sold in US alone.