Tata Motors stock trading near 52-week low, is it a value buy?

Shares of Tata Motors Ltd are trading near their 52-week low. The auto stock fell to its yearly low of Rs 718 on December 23
last year. In terms of technicals, Tata Motors shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages. The stock has also been highly volatile with a beta of 1.1 in the last one year. The Tata Group stock reached a record high of Rs 1,179.05 on July 30, 2024.

In the current session, Tata Motors shares fell 2% to Rs 735.20 against the previous close of Rs 752.55 on BSE. Tata Group shares have risen 75% in two years and 53% in three years. Market cap of the firm fell to Rs 2.72 lakh crore.

Tata Motors stock is trading neither in an oversold nor in overbought zone, indicates its RSI of 44.5. On BSE, 4.21 lakh shares changed hands amounting to a turnover of Rs 31.30 crore.

The stock has a one-year beta of 1.1, indicating very high volatility during the period.

Jefferies has assigned a price target of Rs 930 against the previous target of Rs 1,000 on the Tata Motors stock.

The brokerage said it is positive on Tata’s product strategy and premiumisation focus.

Motilal Oswal has assigned a neutral rating on Tata Motors with a price target of Rs 810. There was an annual growth of 3 per cent in wholesales (except China JV) (+20% quarter on quarter), said the brokerage.

“The stock trades at 12.1x/13.4x FY25E/FY26E consol. EPS and 5.2x/4.6x EV/EBITDA. Reiterate Neutral with Dec’26E SOTP-based target price of Rs 810,” said Motilal Oswal.

Deven Choksey Research has an accumulate rating with a price target of Rs 989.

In its Q3 earnings preview, Tata Motors said,” We expect consolidated revenue to increase by 8.0% YoY, driven by JLR ex. Chery sales volume growth and an increase in average realization. We expect the EBITDA margin to decrease by 52 bps YoY, driven by negative operating leverage and an unfavorable product mix. However, on a sequential basis, the margin is to go up by 178 bps due to positive operating leverage. We expect net profit to decline by 4.5% YoY on the back of a higher base effect,” said the brokerage.

Nomura India has a price target of Rs 990 on the Tata Motors stock.

Brokerage DAM Capital has a ‘buy’ call with a target price of Rs 870 per share.

DAM Capital sees Jaguar Land Rover’s (JLR) volumes to clock a Compounded Annual Growth Rate (CAGR) of 6.5% over financial year 2025-2027. The brokerage is also projecting slightly lower margins and lower valuation multiples for the CV, PV and JLR business.

In the bear case scenario, DAM Capital has a price target of Rs 675 on the stock.

Sharekhan has a price target of Rs 1,099 on the Tata Motors stock.

“We retain our BUY rating on Tata Motors with a revised price target of Rs 1,099, based on expectations of continued improvement in JLR, PV, and CV businesses as well as reduced net automotive debt. The stock trades at a P/E multiple of 12.2x and EV/EBITDA multiple of 5.3x its FY2027E estimates,” said Sharekhan.