3 Tata Group stocks including Voltas tumble up to 13% in 6 sessions, wipe out ₹43,300 crore

In recent sessions, Tata Group stocks have faced significant selling pressure, resulting in a sharp drop in share value. The group stocks, including Voltas, Tata Power, and Tata Motors, were the biggest laggards, and the sell-off was triggered following the release of their March quarter and full-year performance of FY24.

Analysts expect stocks to witness some more selling pressure in the near term. In the previous trading session, shares of Tata Motors tumbled 9.4% in intraday trade before finishing the trade with a drop of 8.30% to log the biggest single-day drop in 2 years. 

Also Read: Tata Motors share price tanks 9% after Q4 results 2024. Opportunity to buy?

During the past six trading sessions, Tata Motors' shares experienced a 6.70% decline, causing a loss of ₹22,592.60 crore in market value. Similarly, Tata Power witnessed a 9.4% drop in the same period, resulting in a ₹14,731 crore reduction in market capitalisation. 

Additionally, Voltas saw its market capitalisation decrease by ₹5,985.83 crore as its stock dropped by 12.8%. Collectively, these stocks have suffered a loss of ₹43,310 crore in market capitalisation.

Also Read: Tata Sons doubles royalty fee for group firms: Here's how much Tata Steel, TCS, Tata Motors will pay

Tata Motors delivered a record-breaking financial performance in FY24, yet it signaled a cautious sales outlook for the ongoing fiscal year within its Jaguar Land Rover division. This cautious outlook prompted analysts to downgrade the stock, leading to a sharp decline in value. 

Jaguar Land Rover (JLR) announced on Friday that it anticipates margins on earnings before interest and taxes (EBIT) for fiscal 2025 to be similar to the 8.5% reported in the previous financial year. The company mentioned that it would need to increase spending to attract customers, although it did not provide specific details.

As for Jaguar, the order book shrank to 133,000 units as of March 31, from 148,000 units at the end of December.

Also Read: JLR drives TaMo’s FY24, but slow lane ahead?

Following the company's announcement, global brokerage firms such as Goldman Sachs Group and Morgan Stanley downgraded their recommendations. Goldman Sachs shifted its rating from ‘buy’ to ‘neutral’ and revised its 12-month price target down to ₹1,040 a share from ₹1,080. Morgan Stanley also adjusted its rating from 'overweight' to ‘equal weight’.

Domestic brokerage firm Motilal Oswal has also revised its EPS estimates downward by 3% and 5% for FY25 and FY26, respectively. The firm has reaffirmed its 'Neutral' rating on the stock while reducing the target price to ₹955 per share, down from the previous ₹970.

The company's shares in CY23 delivered a multibagger return of 101%, making it the only Nifty 50 stock to achieve this feat in the year after a turnaround at JLR, the company's British luxury unit, helped India's No. 3 carmaker return to profit in Q3 FY24. 

Also Read: Earnings review: Voltas shares drop over 9% on weak Q4 results; should you still buy?

Back in March, the company greenlit a demerger plan for Tata Motors, dividing it into two separate listed entities. The first entity will focus on the Commercial Vehicles business and its associated investments, while the second entity will house the Passenger Vehicles segment, comprising PV, EV, JLR, and their related investments.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.