TATAMOTORS - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.4

📊 Fundamental Analysis

Tata Motors is a strong long-term candidate with improving fundamentals and strategic global expansion

ROE (28.1%) & ROCE (20.0%): Solid profitability metrics, especially for a capital-intensive auto business.

Debt-to-Equity (0.62): Moderate leverage, manageable given strong cash flows.

P/E (9.04) vs Industry P/E (31.6): Deeply undervalued.

PEG Ratio (0.14): Indicates strong earnings growth at a cheap valuation.

Dividend Yield (0.87%): Modest, but consistent.

EPS (₹75.6): Strong earnings base.

🚗 Strategic Outlook

Iveco Acquisition: Tata Motors is acquiring Italian truck maker Iveco for €3.8 billion, tripling its commercial vehicle revenue and expanding its global footprint

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Demerger Plan: Passenger and commercial vehicle businesses will split into two listed entities by FY2026, unlocking value and strategic clarity

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EV Leadership: Tata is a front-runner in India’s EV space with Nexon EV, Tigor EV, and Altroz EV.

📈 Technical & Price Trend Insights

Current Price: ₹648.85

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DMA 50 / DMA 200: ₹689 / ₹735 — price is below both, indicating bearish momentum.

RSI (52.4): Neutral zone.

MACD (-0.64): Mild bearish crossover.

Volume: Below average — low conviction.

💰 Ideal Entry Price Zone

Entry Zone: ₹620–₹660 This range aligns with technical support and offers a good margin of safety. Below ₹620, it becomes a strong accumulation zone.

🧭 If You Already Hold the Stock

Exit Strategy / Holding Period

Hold for 5–7 years to benefit from

Global expansion via Iveco

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EV growth and demerger value unlocking

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Partial Exit near ₹850–₹950 if valuations stretch or macro headwinds emerge.

Exit Trigger: If ROE drops below 20% or debt rises significantly post-acquisition.

Analyst Sentiment

YES Securities: Cautious, resistance at ₹710, support at ₹640

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Zee Business: Sell below ₹975 with targets of ₹955 and ₹945 for short-term traders

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Nuvama: ‘Reduce’ rating, target ₹670, citing near-term margin pressures

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📌 Summary

Metric Value Verdict

ROE / ROCE 28.1% / 20.0% Strong

PEG Ratio 0.14 Undervalued growth

Debt-to-Equity 0.62 Moderate risk

Dividend Yield 0.87% Modest

P/E vs Industry 9.04 vs 31.6 Deeply undervalued

Entry Price Zone ₹620–₹660 Attractive

Exit Strategy ₹850–₹950 Partial exit zone

Would you like a forecast for Tata Motors post-demerger or a comparison with Mahindra & Mahindra?

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Business Today | MSN

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Cartoq

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Business Standard

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www.financialexpress.com

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bing.com

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