Tata Motors Shares Drop 5 Per Cent Amid UBS 'Sell' Call

Tata motors share price: UBS has kept its price target for the stock at Rs 825, implying a potential downside of over 20 per cent from the previous close

Tata motors share price: Shares of Tata Motors tumbled over 5 per cent in early trade on Wednesday, ranking among the top losers on the Nifty 50. As of 10.15 am, the stock was trading at Rs Rs 982.00, down 5.19 per cent on the National Stock Exchange (NSE). On the BSE, the stock was trading at Rs 982.35, dropping 5.13 per cent.

The decline follows UBS Securities maintaining its 'sell' rating on Tata Motors, citing downside risks from margin pressures at its luxury division, Jaguar Land Rover (JLR), and in the domestic passenger vehicle segment. UBS has kept its price target for the stock at Rs 825, implying a potential downside of over 20 per cent from the previous close.

UBS expressed concerns that the extended strong performance of JLR's premium models —Defender, Range Rover, and Range Rover Sport — has begun to moderate. The brokerage noted that the order backlog for these models has now returned to pre-Covid levels, and it expects discounts on the Range Rover to rise soon.

“The question is, should investors worry about a spike in JLR discounts?” UBS wrote in a note, hinting that such a development could further weigh on Tata Motors' margins.

The successful sales of JLR's premium models had previously bolstered the automaker's average selling price, but a slowdown in demand could hurt its profitability, UBS warned.

Meanwhile, on September 10, Tata Motors announced significant price cuts across its electric vehicle (EV) line-up under its "Festival of Cars" campaign. The limited-time offer, valid until October 31, aims to make EVs more affordable and accelerate adoption across India. The company also announced six months of free charging at over 5,500 Tata Power stations, making intra-city and inter-city trips hassle-free for EV buyers.

Vivek Srivatsa, chief commercial officer of Tata Passenger Electric Mobility, emphasized the company’s commitment to lowering the cost of EV ownership. "At TATA.ev, our mission is to make EVs mainstream by reducing the cost of ownership. With these special prices, we are bridging the gap between EVs and their petrol or diesel-powered counterparts," Srivatsa said.

The price cuts on EVs come shortly after Tata Motors offered discounts of up to Rs 2.05 lakh on its internal combustion engine (ICE) vehicles as part of the same campaign.