Tata Motors Shares Plunge 7%: Should You Buy Now or Wait for Lower Levels?
Shares of Tata Motors Ltd saw a sharp decline, mirroring the broader automobile sector’s slump following US President Donald Trump’s announcement of a 25% tariff on imported vehicles and parts. Investors are now questioning whether to buy at current levels or wait for further dips.
Recent Stock Performance
The stock tumbled 6.58% to a day low of ₹661.35, and was last seen trading 5.32% lower at ₹670.30. Over the last six months, Tata Motors has declined 32.49%, making it a key stock under pressure.
Despite the recent fall, Tata Motors traded above the 20-day and 30-day simple moving averages (SMAs) but remained below the 5-day, 10-day, 50-day, 100-day, 150-day, and 200-day SMAs. This suggests mixed momentum, with shorter-term trends being negative while some stability remains in mid-term averages.
Key Support and Resistance Levels
Analysts have identified ₹650 as an immediate support level, followed by ₹615 and ₹610. Some experts believe that ₹630 could be an attractive entry point, while others predict a strong rebound in the near term.
- Arpit Beriwal, Derivatives Analyst at Motilal Oswal Financial Services, noted that Tata Motors broke out above ₹670-680 on a monthly chart and has found support around ₹615-610. He suggests buying near ₹630 for long-term gains.
- Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, emphasized that JLR’s (Jaguar Land Rover) improving sales and rate cuts in Europe position Tata Motors for a 20-25% rebound in Q4 FY25. The company derives 67% of its revenue from JLR, with China contributing 27% of JLR’s sales.
- Osho Krishan, Senior Research Analyst at Angel One, believes that the ₹650 level should act as a cushion, while a break above ₹725 could trigger momentum toward ₹770-800.
Technical Indicators and Valuation
The stock’s 14-day Relative Strength Index (RSI) stands at 46.46, indicating that it is neither overbought nor oversold. A value below 30 signals oversold conditions, while above 70 indicates overbought levels.
Tata Motors’ current valuation metrics include:
- Price-to-Earnings (P/E) Ratio: 39.83
- Price-to-Book (P/B) Ratio: 8.06
- Earnings Per Share (EPS): ₹16.84
- Return on Equity (RoE): 20.24%
Additionally, Tata Motors has a one-year beta of 1.2, meaning it is more volatile than the broader market.
Shareholding Pattern
As of December 2024, Tata Motors’ promoters held a 42.58% stake in the company, reflecting strong promoter confidence despite recent price fluctuations.
Should You Buy or Wait?
Tata Motors remains a fundamentally strong company, but the stock’s near-term movement depends on global trade policies, JLR sales performance, and technical levels. If it falls closer to ₹630, investors looking for a long-term opportunity may consider entering, while those seeking momentum trades should watch for a breakout above ₹725 for further upside.