Tata Motors Shares Down 47% From 52-Wk High! Oversold Territory Hits; What's Driving the Fall?

Shares of Tata Motors Ltd have been on a continuous downtrend, recording a steep decline of 43.56% over the past six months. In today's trading session, Tata Motors stock touched a new 52-week low of Rs 606.30 due to the intense selling pressure in the stock market.

In the last few trading sessions, the broader stock market has been witnessing a sharp correction, with both Sensex and Nifty dropping more than 2.33%. Amid the relentless selling, the Relative Strength Index (RSI) of Tata Motors has fallen to 26.3, signaling oversold conditions. RSI is a key momentum indicator that helps traders assess whether a stock is overbought or oversold. Typically, an RSI below 30 indicates an oversold stock, suggesting a potential price rebound if buying interest returns.

Tata Motors Share Price Movement and Analyst Targets

Tata Motors share price on March 3rd stands at Rs. 614 at the time of writing, which dropped a 1.07% decline in morning trade. The stock has faced significant selling pressure, dropping 8.43% over the past week. In February alone, Tata Motors' stock declined 10.68%, underperforming broader market indices.

Reasons Behind the Decline

As per a CLSA report, the ongoing correction in Tata Motors stock is mainly due to certain reasons. Firstly, sluggish growth in domestic passenger vehicles (PV) and heavy commercial vehicles (HCV) sales is projected for FY 25-26. Additionally Weak demand outlook for Jaguar Land Rover (JLR) across key international markets.

The report also stated that concerns over potential US import tariffs on European Union (EU) goods could impact JLR's US retail sales, which have 25% of total JLR sales.

Tata Motors Share Price Target

Global brokerage firm CLSA has taken a more optimistic stance on Tata Motors future performance. In a recent report, CLSA stated, "We upgrade TTMT to 'High Conviction Outperform' (HC O-PF) from 'Outperform' (O-PF), maintaining our target price (TP) at Rs. 930."

Tata Motors February 2025 Sales Decline

Tata Motors reported a 9% year-on-year (YoY) decline in total sales for February 2025, indicating a weaker demand in the passenger vehicle segment. According to company data released on March 1st, Tata Motors' domestic and international sales stood at 79,344 units, compared to 86,406 units in February 2024, marking an overall 8% decline.

The Medium & Heavy Commercial Vehicles (MH&ICV) segment, which includes trucks and buses for both domestic and international markets, saw a slight uptick in sales. The total stood at 16,693 units in February 2025, compared to 16,663 units in February 2024.

The passenger vehicle segment, which includes Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited, recorded 46,811 units sold in February 2025, representing a 9% YoY decline from 51,321 units in February 2024.

Should You Buy Tata Motors Stock?

With a significant correction already in place, long-term investors may find current levels attractive. Despite the current weakness, technical analysts suggest that oversold conditions could trigger a short-term recovery, provided market sentiment improves.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.