Tata Motors Split: Share Price Target for 2025 and Demerger Insights

Tata Motors, a leading company in the Tata Group and a major player on Dalal Street, has announced its decision to split into two specialized entities: commercial vehicles and passenger vehicles. This restructuring move, along with the company's recent share price performance, has captured significant investor interest. The demerger ratio is set at 1:1, leaving shareholders eager to see if the stock can return to the Rs 1000 mark in 2025.

Tata Motors Split and Demerger Ratio

As part of its restructuring strategy, Tata Motors will divide its business operations into two distinct units. Shareholders will receive one share in both the new commercial and passenger vehicle companies for every share they currently own in Tata Motors.

This 1:1 demerger ratio ensures shareholders retain equal stakes in both entities. The split is expected to be finalized in the first quarter of the next financial year, with both companies getting listed on stock exchanges soon after.

The goal of this split is to provide better operational focus, unlock shareholder value, and allow each segment to leverage its growth potential more effectively.

Current Tata Motors Share Performance

At present, Tata Motors’ share price is trading at Rs 790.60, approximately 33% lower than its 52-week high of Rs 1,179.05, recorded on July 30, 2024. While the stock has delivered a modest 9% return over the past year, it has remained relatively flat throughout 2024, leaving investors disappointed.

Tata Motors Share Price Target for 2025

Analysts are cautiously optimistic about the future of Tata Motors' share price.

According to VLA Ambala, a SEBI-registered research analyst, the stock’s Relative Strength Index (RSI) indicates caution with readings of 51 (monthly), 35 (weekly), and 40 (daily). Ambala recommends a buying range of Rs 680-740, with a potential price target of Rs 800-1170 in 2025.

She advises holding the stock for a period of 3 to 10 months, while maintaining a stop loss at Rs 600, to manage risks effectively.

Challenges and Opportunities Post-Demerger

The split is expected to help Tata Motors address unique challenges and opportunities in both the commercial and passenger vehicle markets:

• Commercial Vehicles: Tata Motors enjoys a strong presence in this segment but faces cyclical demand patterns and rising competition. The split could allow the company to refine its focus and enhance operational efficiency.

• Passenger Vehicles: This segment has immense growth potential, particularly with the increasing demand for electric vehicles (EVs). Tata Motors is well-positioned to leverage its leadership in the EV market and capitalize on global trends.

Despite these opportunities, the success of Tata Motors' share price rebound will depend on the effective execution of the split and broader market dynamics.

What Investors Should Expect

Tata Motors remains a favorite among retail investors, but the recent correction in its share price has raised questions about its recovery. The split has the potential to unlock shareholder value and boost investor confidence.

For investors, the current dip presents an opportunity to accumulate shares at lower levels. With cautious buying in the suggested price range of Rs 680-740, the stock could deliver substantial returns if the demerger is executed successfully.

Long-Term Outlook for Tata Motors Stock

The long-term outlook for Tata Motors is positive, driven by the company’s strong leadership under the Tata Group and its focus on innovation. As the automotive industry shifts toward electric and autonomous vehicles, Tata Motors is well-positioned to lead in both segments.

The company’s ability to execute the split efficiently and adapt to market trends will play a critical role in determining its share price trajectory in 2025 and beyond.

Also Read: Elon Musk’s ‘Hmm’ Post After AI Whistleblower’s Death Raises Questions - All You Have To Know