Worst day for Tata Motors investors in more than a month as UBS target implies 20% downside

Tata Motors shares in Wednesday's trade fell up to 6 per cent on Wednesday as UBS maintained its 'sell' call on the stock with a target of Rs 825. The new target implies a downside of over 20 per cent from the last close.

This is the stock's biggest downside in over a month on August 5 when the stock nosedived as much as 7 per cent intraday.

At around 12:10 pm, the stock traded down by 5 per cent at Rs 983.80 or down Rs 51.65 per share.

UBS held that the discount on the company's Range Rover Sport has become steep and is expected to increase further. Also, the brokerage held that the demand for  the company's new models is seeing a slowdown. Furthermore, to worsen the situation, the company's order book is at levels below Covid period, signalling a concern. 

So,  considering the steep discounts and demand for the ICE (internal combustion engine) and hybrid models, the brokerage expects a negative impact on the company's financials in FY26. Additionally, the margin slippage for JLR is another major downside risk.

Alongside, BMW in light of the falling demand for cars in China has slashed its guidance for 2024.  BMW maintained that the weak sentiment prevails despite the government's boost to push the markets. Also, the guidance has been lowered given the expenses pertaining to the product recall amid braking system fault in as many as 15 lakh units.

Tata Motors' share price performance

Tata Motors shares rallied 57 per cent in the last one year.