Tata Motors Shares Plunge As UBS Maintains 'Sell', Sees 25% Downside

Shares of Tata Motors Ltd. plunged more than 4% on Wednesday after UBS maintained its target price that implies a 25% downside. This is on the expectations that the fiscal 2026 could be weak for the automaker on multiple headwinds.

UBS maintained a 'sell' call on the automaker with a target price of Rs 825 per share. The target price by the brokerage is the lowest for the stock among the analysts tracked by Bloomberg.

Rising discounts, moderate growth and lack of new launches could result in a weak fiscal 2026, the brokerage said.

Defender, Range Rover and Range Rover Sport have aided average selling price and gross margins, UBS said. "Extended success of key Jaguar Land Rover models have started to moderate with order book below pre-Covid."

The scrip's downfall also comes a day after the automaker slashed prices of its passenger electric vehicles by up to Rs 3 lakh to boost festive season sales.

The price reduction applies exclusively to the company's electric models, including the Punch, Nexon, and Tiago, Informist reported on Tuesday. This limited-time offer is valid until Oct. 31, 2024.

Tata Punch will see a price cut of up to Rs 1.2 lakh. While, the Nexon EV received the steepest reduction, with prices dropping by up to Rs 3 lakh. The Tiago EV also benefits from a price cut of up to Rs 40,000.

Tata Motors stock fell as much as 4.47% in early trade to Rs 989.5 apiece on the NSE. It was trading 3.92% lower at Rs 995.2 apiece, compared to a 0.07% decline in the benchmark Nifty 50 as of 09:34 a.m.

It has risen 56% during the last 12 months and has advanced by 27% on a year-to-date basis. The total traded volume so far in the day stood at 3.6 times its 30-day average. The relative strength index was at 33.

Twenty three analysts tracking the company have a 'buy' rating on the stock, seven suggest a 'hold' and five have a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 18%.