3 reasons why Tata Motors hit a fresh 52-week low

Shares of Tata Motors have been in free fall for quite some time now. The stock has fallen 44% from its 52-week high of ₹1,179.05, the level it had touched on July 30, 2024, data from the BSE showed. The stock in intraday deals on Tuesday, February 25 fell as much as 0.91% to hit a new 52-week low of ₹662.10.

The stock has come under intense selling pressure and is one of the leading underperformers in the NIFTY50 basket of shares.

Weak Q3 earnings

Tata Motors subsidiary Jaguar Land Rover maker (JLR) is its highest contributor to revenue and margins. However, JLR witnessed a fall in margins in the December quarter. Further, the demand outlook in key markets like China and Europe remained weak. This was the main reason for Tata Motors’ poor performance in Q3FY25.

Tata Motors consolidated net profit in the December quarter dropped 22%to ₹5,451 crore as against ₹7,025 crore in the same quarter last year.

Its total revenue from operations rose nearly 3% to ₹1,13,575 crore.

Revenue from the commercial vehicle segment, which is a significant contributor to the overall revenue, fell 8.4% annually to ₹18,431 crore due to a slowdown in the domestic market.

Rising competition

Tata Motors is also facing stiff competition from rival Mahindra & Mahindra (M&M) in the SUV segment.

In September last year, M&M surpassed Tata Motors as the country's third-largest car maker by volume. In January 2025, M&M sold 50,659 SUVs, 18% higher than the same month in 2024. Meanwhile, Tata Motors passenger vehicle sales dropped 10% to 48,076 units against 53,633 units sold in the same month last year.

Tesla's entry

The possibility of Tesla's entry into the Indian automobile market has added to the negative sentiment for Tata Motors shares.

Media reports suggest that the government may reduce import duties on electric vehicles, potentially facilitating Tesla's entry into the Indian market. This development has raised concerns about heightened competition.

Tesla has started the hiring process in India, and as per a LinkedIn post, Tesla is currently offering 64 jobs in the Mumbai Metropolitan Region. Some media reports suggest that Tesla is targeting engineers and employees from Tata Motors to begin its operations in India.