Tata Motors Share Price: Tata Group-backed automobile giant, Tata Motors continued to face selling pressure this month. On December 18, the stock dipped by nearly 3%, extending its 3-consecutive sessions losing streak. Tata Motors stock which was a 2023 multibagger on Nifty, is down by 3.5% in 2024 so far. Going ahead, Tata Motors shares will be in focus for its commercial vehicles price hike and sales figures in January 2025. That being said, is Tata Motors stock undervalued and should you buy-on-dips?
Tata Motors Share Price:
At the time of writing, Tata Motors stock traded lower by 2.12% to trade at Rs 762.80 apiece on BSE, with a market cap of Rs 2,80,814.61 crore. In the early trade, the stock dropped by 2.6% to hit an intraday low of Rs 759.30 apiece.
The stock has been on a losing streak since three consecutive sessions, declining by 4% on BSE. In six months, the stock has dipped by 22.56%, while year-to-date, the stock is down by 3.5%.
The stock's price-to-equity ratio is at 30x, while the return on equity is at 30.57%. From the December 18th intraday low level, Tata Motors stock is now RS 63.4 away from hitting an intraday low of Rs 695.90 apiece on BSE. The stock's 52-week high is at Rs 1,179.05 apiece.
Is Tata Motors Stock Undervalued?
As per Alpha Spread data, the Relative Value of TATAMOTORS stock under the Base Case scenario is 1 646.8 INR. Compared to the current market price of 765.2 INR, Tata Motors Ltd is Undervalued by 54%.
Buy-On-Dips Or Sell Tata Motors Stock?
As per Trendlyne data, the consensus recommendation from 30 analysts for Tata Motors Ltd. is BUY. EPS is expected to reduce by 27% in FY25. The average 1-year target price is at Rs 965.40 apiece, which signals a 22% potential upside.
Notably, Mirae Asset Sharekhan has recommended BUY on Tata Motors for a target price of Rs 1,099. While brokerage Nuvama has suggested BUY for a target price of Rs 990. However, Geojit recommended to HOLD the stock,
On the valuation, Geojit's note said, "Tata Motors is well-positioned for long-term growth in the automobile industry, supported by a diverse product range, increasing electric vehicle (EV) and compressed natural gas contribution, and capacity expansion. While its JLR division faces short-term production challenges despite strong global demand, the PV business is set to gain momentum with new launches. Additionally, the CV segment is expected to grow, driven by the government's infrastructure push. However, The current price level suggests limited upside potential. Hence, we reiterate our HOLD rating on the stock with a revised target price of Rs. 855 based on SOTP valuation."
Tata Motors Demerger:
The auto player is set to split in the ratio of 1:2. The company is planning the demerger of Tata Motors into two separate listed companies housing A) the Commercial Vehicles business and its related investments in one entity and B) the Passenger Vehicles businesses including PV, EV, JLR, and its related investments in another entity.
Tata Motors Price Hike:
Last week, on December 12, the company announced a price hike of approximately 2% across its trucks and buses portfolio which is part of its commercial vehicle segment. The price increase will come into effect from 1st January 2025.
In its regulatory filing, Tata Motors said, the price increase is to offset the rise in input costs. While the price increase will vary as per individual model and variant, it will be applicable across the entire range of trucks and buses.
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