Tata Motors, one of India’s most iconic automobile companies, is facing an intriguing moment in New Year 2025. Despite trading near its 52-week low, brokerages are increasingly optimistic about its stock, with some even setting a target price that suggests significant upside potential. Will Tata Motors manage to break its slump and reach the ₹1,000 mark? Let’s dive into what’s driving this renewed optimism and what investors should expect in the coming months.
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Tata Motors at a Crossroads: A Rocky Start to 2025
At the close of January 1, 2025, Tata Motors’ share price stood at Rs 749.25, showing a 1.2% rise. However, it’s still hovering around its 52-week low, which was Rs 718. This marks a stark contrast to its 52-week high of Rs 1,179, indicating a significant decline in the past year.
Yet, despite these challenges, Tata Motors has maintained a strong market cap of Rs 2.75 lakh crore, underscoring its resilience. The stock’s P/E ratio of 29.45x and Return on Equity (RoE) of 30.6% are impressive, suggesting that the company’s fundamentals are solid, even though its stock price has been under pressure.
Brokerages Turn Positive: Tata Motors Could Hit Rs 1,000 in 2025
In a surprising turn, many leading brokerages are now upgrading their outlook on Tata Motors. DAM Capital, for instance, has shifted its stance from Neutral to Buy, with a revised target price of Rs 870. The brokerage’s positive outlook is largely based on Tata Motors’ recovery in its Jaguar Land Rover (JLR) division, which it expects to grow at a 6.5% CAGR from 2025 to 2027. Additionally, commercial vehicles (CV) are expected to see an upswing in demand, especially in the heavy commercial vehicle (HCV) segment.
Similarly, Sharekhan has set a more ambitious target of Rs 1,099 for Tata Motors, predicting growth across its Passenger Vehicles (PV), Electric Vehicles (EV), and JLR segments. They believe the company’s focus on reducing automotive debt will further bolster its financial position and lead to sustained growth. The combination of stronger JLR performance and an expanding EV portfolio is expected to fuel long-term upside potential.
Key Drivers: Price Hikes, Demerger, and Sales Growth
Several developments at Tata Motors could catalyze this upward trajectory in 2025. First, the company announced a 2% price hike for its commercial vehicles in January 2025, aimed at mitigating the rising costs of raw materials and supporting profit margins. This move should help offset some of the inflationary pressures facing the company.
Additionally, Tata Motors is moving forward with a demerger of its business into two separate entities—one focused on Commercial Vehicles and the other on Passenger Vehicles, including JLR and EVs. This 1:1 demerger could unlock value for shareholders by giving each business unit more focus and autonomy.
Tata Motors also reported a 1% YoY growth in its sales for December 2024, totaling 76,599 units. While this growth is modest, the company expects stronger performance in the latter half of the year, especially in its commercial vehicle segment, where demand is picking up.
Will Tata Motors Reach Rs 1,000 in 2025?
Given the strong fundamentals, strategic price hikes, and the upcoming demerger, analysts are bullish about Tata Motors’ prospects. The company’s EV push and JLR recovery could drive the stock towards Rs 1,000 in 2025. Brokerages like Emkay Global and LKP Securities have set even higher targets, forecasting Rs 1,099 per share, based on the potential growth in Tata Motors’ key segments.
However, investors should remain mindful of short-term market volatility. While the company’s long-term prospects appear strong, global challenges and fluctuating market conditions could create bumps along the way.
Conclusion: A Stock Worth Watching
Tata Motors’ stock is poised for potential growth in 2025, driven by key initiatives such as price hikes, the demerger, and recovery in its commercial and passenger vehicle businesses. With brokerages upgrading their outlook and a solid strategy in place, Tata Motors could very well reach Rs 1,000 or higher this year.
For investors, it’s crucial to monitor the company’s quarterly results, the progress of its demerger, and developments in its EV and JLR segments. Tata Motors is certainly a stock to watch closely as it navigates through 2025, with the potential for significant upside in the coming months.