Tata Motors Share Price Drops Amid Auto Sector Weakness and High Inventory - Read Now
Tata Motors' share price plunged to ₹840.80 amid weak auto demand and high inventories. Sales dropped nearly 12% year-over-year, adding to sector-wide struggles. The company’s earnings on Nov 8 could signal further market direction.
Share prices of Tata Motors plummeted sharply on Tuesday morning, falling by 4% to intraday low at ₹840.80. That is part of a broader negative trend where the Indian auto sector as a whole suffers with losses in Maruti Suzuki, Hyundai, and Mahindra. The Nifty Auto Index fell by 2% in morning trade reflecting investor concerns pan industry.
Why Tata Motors and Auto Stocks Are Falling
There seems to be the central driving force behind the reason due to weak automobile sector demand. The dealers hold 7.9 lakh or ₹79,000 crores worth vehicles against expected inventory levels and their norms. FADA, also reports that sales at personal vehicle retail segments decline down by 18.81% year-over-year this September despite factors driving seasons like Ganesh Chaturthi and Onam.
Factors Influencing Auto Sales
According to FADA, low demand in the market has been cited for various reasons. These vary from the economic factor to a continued festive sale, or specific time frames like "shraddh" and "pitrapaksha," which do not encourage much buying. More specifically, excess rain in a few areas has dented buyers' sentiments. Hence, vehicle inventory levels are at all-time highs with some dealers recording an inventory level of 80-85 days on September 30.
Tata Motors Sales Decline
The most sensitive detail here is that in Tata Motors, sales volumes were declined in the company both for domestic as well as international markets. For Q2 FY25, Tata Motors sold 2.15 lakh units down nearly 12% with that sold in the similar quarter of last year amounting to 2.43 lakh units. These slump in sales volumes have seen Tata Motors share prices under bearish momentum as these slipped down about 13% during the last month.
Earnings and Market Expectations
Tata Motors is due to report its earnings on November 8, and investors are watching how the company will react to the current challenges. Technical analysts point out that the stock of the company is likely to continue falling in the short term as pressure continues on the auto sector and as a result of possible earnings that are lower than expected.
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