Tata Motors share price rises 2%, looks set to snap 3-day losing streak; should you buy?

Mint

3 days ago

Tata Motors' share price rose almost 2 per cent in intraday trade on the BSE on Wednesday, June 4, looking set to snap its three-day losing streak. Tata Motors share price opened at ₹ 703 against its previous close of ₹ 703.55 and climbed 1.7 per cent to an intraday high of ₹ 715.50. The auto stock, however, pared gains and traded about half a per cent up at ₹ 707 around 12:30 PM.
Tata Motors' share price has lost about 22 per cent over the last year, hitting a 52-week high of ₹ 1,179.05 on July 30 last year and a 52-week low of ₹ 542.55 on April 7 this year. Tariff-related uncertainties and economic slowdown in key markets seem to have weighed on stock prices.
However, the stock has seen decent gains in the recent past, rising 12 per cent in May, after the company's broadly in-line Q4 results and easing concerns over a trade war.
Tata Motors reported a 51.34 per cent year-on-year (YoY) fall in its consolidated net profit to ₹ 8,470 crore. The company's revenue during Q4FY25, however, increased nominally by 0.4 per cent YoY to ₹ 1,19,502 crore. EBITDA declined 4.1 per cent YoY to ₹ 16,700 crore, while EBITDA margin declined 60 bps to 14 per cent.
Meanwhile, Tata Motors' sales in the domestic and international markets for May 2025 stood at 70,187 units, compared to 76,766 units during May 2024.
Total domestic sales in May declined 10 per cent YoY to 67,429 units against 75,173 units in May 2024.
Tata Motors' Q4 results were largely in line with the estimates of experts. However, experts appear slightly cautious as they highlight multiple headwinds for JLR and moderation in demand for consumer vehicles (CV) and passenger vehicles (PV) in India.
After the automaker's Q4 earnings, Motilal Oswal Financial Services maintained its neutral view on the stock with a target price of ₹ 690.
"JLR is facing multiple headwinds, which include tariff-led uncertainty for exports to the US, demand weakness in key regions like Europe and China, and rising VME (variable marketing expense), warranty and emission costs. We expect margin pressure to persist for JLR and factor in a 100 bps margin decline over FY25-27E," said Motilal Oswal Financial Services.
"Even in India, both CV and PV businesses are seeing moderation in demand. Given these headwinds, we have lowered our earnings estimates for Tata Motors by 12 per cent and 5 per cent over FY26 and FY27, respectively. For the lack of any triggers, we reiterate neutral with FY27E SOTP-based target price of ₹ 690," Motilal said.
Kumar Rakesh, IT and auto analyst at BNP Paribas India, cut the company's FY26-27E consolidated PAT estimate by 2-8 per cent, adjusting the volume and margin estimates and factoring in the impact of the change in ownership of Tata Motors Finance.
BNP Paribas has an 'outperform' view on the stock with a target price of ₹ 830.
On the other hand, technical experts point out favourable technical indicators for the stock, which suggest one can consider buying the stock at this juncture.
Anshul Jain, Head of Research at Lakshmishree Investments, underscored that Tata Motors has been consolidating around the ₹ 725 zone for the past three weeks and is expected to continue for another three to four weeks.
"The ongoing tight range is setting a strong base for the next breakout. Once the consolidation phase completes, the stock is likely to break out and head higher towards ₹ 810, which is the next major weekly resistance zone. The structure remains bullish with healthy digestion of prior gains," said Jain.
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, pointed out that Tata Motors has formed a strong base near the S3 Camarilla yearly support level, suggesting a potential exhaustion of the recent downtrend.
This outlook is reinforced by a clear bullish divergence observed on the weekly chart. Additionally, the RSI on the weekly timeframe has shaped an inverse head and shoulders pattern, with a confirmed breakout above the neckline, further strengthening the bullish bias, Patel pointed out.
"Given these confluences, the setup points to a high-probability reversal. A long position is advised in the ₹ 690–710 range, aiming for an upside target of ₹ 780. To manage risk, a protective stop loss should be placed below ₹ 660 on a daily closing basis," said Patel.
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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.