Tata Motors’ stock has been steadily dropping over the last two months, hitting a four-month low on Friday, October 4. The stock is now down by 21% from its all-time high of ₹1,179, which it reached in July.
In September, the stock fell by 12.30%, marking its biggest monthly decline in two years. This downward trend has continued into October, with the stock down 4.50% in just three trading sessions. Falling demand for passenger vehicles and a cautious outlook from analysts have hurt investor confidence, leading to a significant drop in Tata Motors’ stock price.
Technical Analysis and Stock Support Levels
Kapil Shah, a technical analyst at Emkay Global, explained that the stock has dropped to its 216-day Exponential Moving Average, a key long-term indicator. The ₹920 to ₹890 range has been a strong support area for the past 150 days. The Relative Strength Index (RSI) shows the stock is now in the oversold zone, meaning it’s been heavily sold in a short period. If the stock falls below ₹890, it could drop to ₹830. However, if it rises above ₹960, this could signal the start of a recovery.
Weak Sales Numbers
In September 2024, Tata Motors sold 41,063 passenger vehicles (including electric vehicles), down 8% compared to September 2023. Commercial vehicle sales also fell by 23%, with only 30,032 units sold. Tata Motors slipped to fourth place in the passenger vehicle market, with Mahindra and Mahindra surpassing it by selling 51,062 units.
The overall passenger vehicle industry is seeing lower demand, causing a buildup of inventory at dealerships. This has led car manufacturers to reduce production. Jaguar Land Rover, Tata Motors’ luxury division, is also struggling, especially in the EU and China.
Challenges in the Electric Vehicle (EV) Segment
Tata Motors, a leader in the electric vehicle market, faced challenges in September due to the end of registration and road tax exemptions in key states. Fleet EV sales were also affected by the end of the FAME II scheme and the exclusion of fleet vehicles from the PM-eDRIVE initiative.
Q2 Performance and Future Plans
In Q2 FY25, Tata Motors sold 130,753 units, a 6% decrease compared to the same quarter in FY24. Despite this, the company received a positive response to its new Curvv model, which offers petrol, diesel, and electric options. The company has already started delivering the Curvv and plans to ramp up production in the third quarter.
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