Tata Motors shares drop 5% on concerns about lower car sales, moderate growth outlook 

Shares of Tata Motors fell 5% to an intraday low of Rs 1,090.05 despite reporting a jump of  74% on year to Rs 5,566 crore in Q1 FY25 against Rs 3,203 crore in Q1 of FY24. The fall in the price came after the company’s monthly sales numbers came below the street’s expectations. 

Tata Motors registered a sale of 25,436 units in July 2024, falling 19% on year. During the same period last year, Tata’s domestic CV sales were 31,216 units.

The company reported a 6% drop in its domestic PV sales. Tata sold 44,725 units in July 2024 as compared to selling 47,628 units in July 2023.

On top of all this, the company gave a moderate growth outlook of 2-3% for the year for the JLR business. Pressured by subdued European markets and inflationary pressures across Europe, said Shridhar Kallani, Automobile Research Associate with Axis Securities. The decline in CV and PV sales created a bit of jittering in the markets, which should be seen as the “buy on dips”. Furthermore, the company has announced a demerger of its CV business into a different entity, which will further unlock the value, he concluded.   

Shares of Tata Motors have fallen around 3% in the last five days. However, it has given a return of 12.5% in the past month. The stock raised its investors’ value by more than 25% in the last six months. Looking at the long-term returns, the stock has risen 744% in the past five years. 

To give a comparison, the benchmark index, Nifty 50, has fallen 0.5% in the last five days. Albeit, it has risen 2.7% in the last one month. The index has given a return of around 14% in the past six months and over 125% in the last five years. 

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