Early on Thursday, the price of Tata Motors' stock fell more than 9%, hitting its 52-week low of Rs 684.25.
 
After closing the previous session at Rs 752.45, the price of Tata Motors' shares began at Rs 715. At the time the post was published, the shares were down 6.45%, trading at Rs 703.90. The market value of the company was Rs 2,59,132.79 crore.
 
Following the company's third-quarter (Q3 FY25) financial results, which fell short of market forecasts on Wednesday, share prices began to decline. The stock saw a fall as a result of the lower-than-expected profits, with many brokerage firms lowering their price targets and downgrading their recommendations.
 
For the October–December quarter, the company's earnings dropped 22% year over year (YoY) to Rs 5,451 crore. Nonetheless, operating income increased 3% year over year to Rs 1.13 lakh billion. The company's EBITDA margin shrank by 240 basis points (bps) to 11.5%, while its earnings before interest, tax, depreciation, and amortization (EBITDA) fell 15% year over year to Rs 13,032 crore.
 
The international brokerage company Jefferies downgraded Tata Motors from "buy" to "underperform" due to the lower earnings. Additionally, the company lowered its price estimate from Rs 930 to Rs 660. Jefferies anticipated more pressure on the stock in the upcoming months, as shown by the downgrade.
 
While keeping a "reduce" call on the company, Nuvama Institutional Equities also cut its price objective for Tata Motors by 4% to Rs 720. According to Nuvama, it has reduced its forecast of Tata Motors' FY25 EBITDA by 4%. The brokerage business stated that between FY25 and FY27, it anticipates modest revenue growth and 2% yearly EBITDA growth. Nuvama forecasted volume contraction for Jaguar land rover (JLR), the premium automotive division of Tata Motors, as a result of a drop in the order book, the discontinuance of Jaguar models, and weakened demand in important regions.
 
With a price objective of Rs 853, Morgan Stanley maintained its "equal-weight" rating on Tata Motors. One major issue, the firm noted, was the company's reduced revenue and return on capital employed (RoCE) estimate for JLR. It pointed out that Tata Motors' Q3 results were below expectations, casting uncertainty on the company's success in the near future.
 
With a price objective of Rs 760, UBS, another international firm, kept its "sell" rating on Tata Motors. Given the uncertainties in the fiscal years 2026 and 2027, the firm said the company's fourth-quarter projection looked ambitious. According to UBS, JLR will need China's economic recovery to reach a 10% EBIT (Earnings Before Interest and Taxes) margin in the upcoming fiscal year.
 
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G GOWTHAM

30/01/2025 10:58 AM