Tata Motors Shares: SEBI Analyst Says Stock Is a Cyclical Play, Not A Compounder
Synopsis
The company posted revenue of ₹1.07 lakh crore and operating profit of ₹10,224 crore in Q1, with JLR driving growth but margins remaining vulnerable to global demand and commodity costs.
Tata Motors shares fell on Tuesday, a day after the company cut prices on its commercial vehicles by up to ₹4.65 lakh, passing on GST benefits from the tax rate reduction to 18% from 28%.
Fundamental View
SEBI-registered analyst Finkhoz rated the stock 7/10, highlighting Tata Motors’ cyclical nature. In the first quarter (Q1), revenue came in at ₹1.07 lakh crore with operating profit at ₹10,224 crore, a 10% margin.
Profits and margins have historically been volatile, shaped by commodity costs, Jaguar Land Rover (JLR) demand, and currency moves. Debt has continued to decline, leaving the company financially stronger than it was three to four years ago.
JLR remains the growth driver with EV and hybrid launches, though its sales rely heavily on the UK, EU, and China.
Domestically, GST cuts are expected to support the commercial vehicle business, while passenger vehicles continue to expand. Key risks include global slowdowns and commodity inflation.
Technical View
The stock found support at ₹653, in line with the 200-day EMA. RSI at 54.7 suggested fresh momentum but remained below overbought levels. Resistance lies at ₹726–730, with a potential breakout target of ₹780–800.
Support is anchored at ₹653. Price action showed bullish momentum, though a breakout with volume confirmation is required before chasing further gains.
Finkhoz set a near-term target of ₹780–800 and a medium-term target above ₹850 if JLR margins hold and domestic demand remains steady.
The view underscored that the company’s rally reflects policy tailwinds, technical momentum, and an improved balance sheet, but reiterated that Tata Motors is better seen as a cyclical opportunity rather than a steady compounder.
What Is The Retail Mood?
On Stocktwits, retail sentiment for Tata Motors was ‘bullish’ amid ‘high’ message volume.
Tata Motors’ stock has declined 4.5% so far in 2025.
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