Significant Drop in Tata Motors Share Price (TTM) Post-Q4 2024 Results: Is it the Perfect Buying Opportunity?

• Tata Motors’ share price fell by over 9% in early trading on Monday, following the announcement of their Q4 results 2024 last week.
• Analysts attribute this drop to muted results with limited margin expansion, despite higher volumes.
• Despite the robust performance in FY24, there are clear headwinds ahead that are likely to hurt Tata Motors’ performance.

Tata Motors’ share price drops following Q4 results 2024 announcement, with analysts predicting further downsides. The company remains cautiously optimistic, despite concerns over emerging demand.

Tata Motors Share Price Drop

On Monday, Tata Motors’ share price opened at ₹1,005 apiece on NSE and quickly fell to an intraday low of ₹947.20 per share. This represents an intraday loss of more than 9 percent. The drop is largely attributed to the Q4 results 2024 announced last week, which showed muted results with limited margin expansion across businesses despite higher volumes.

Analysts’ Perspective

Chirag Jain, Senior Research Analyst at Emkay Global Financial Services, links the share price drop to the Q4 results. He states, “While deleveraging progress continues, we believe the best may be behind for all businesses amid i) declining orderbook, normalizing mix, and higher customer acquisition costs at JLR, with FCF generation to normalize; ii) flattish growth outlook for domestic CV space; and iii) moderating India PV outlook.” He further predicts that Tata Motors’ share price may drop further to the tune of ₹950 apiece.

Motilal Oswal’s Neutral Stance

Motilal Oswal maintains a ‘neutral’ view on Tata Motors share price outlook. Their report states, “While there is no doubt that TTMT has delivered an extremely robust performance across its key segments in FY24, there are clear headwinds ahead that are likely to hurt its performance. We have lowered our EPS estimates by 3%/5% for FY25/FY26. The stock trades at 18x/15.6x FY25E/FY26E consolidated EPS and 6.2x/5.3x EV/EBITDA. Reiterate Neutral with our FY26E SOTP-based TP of ₹955.”

Tata Motors Q4 Results 2024

Tata Motors reported a significant 222 percent year-on-year increase in its net profit, reaching ₹17,407.18 crore. Meanwhile, the company witnessed a notable 13.3 percent surge in consolidated revenue, amounting to ₹1,19,986.31 crore.

Conclusion

Despite the robust performance in FY24, Tata Motors faces potential headwinds that may impact its performance. With analysts predicting further downsides, investors are advised to consult with certified experts before making any investment decisions.