Tata Motors shares down 3% as UBS keeps 'sell'

According to reports, UBS set a price target of Rs 825, suggesting an 11 percent downside from the previous close of Rs 927.

Tata Motors' stock has been under pressure, declining 11 percent over the past month.

The brokerage notes that China's once-rapid growth as a market for global carmakers has slowed, and while premium vehicles may still perform relatively well, global players are expected to lose market share.

UBS also emphasized the importance of global automakers optimizing their production capacity, adjusting product portfolios, and collaborating with local partners.

In an earlier report, UBS mentioned that Jaguar Land Rover's (JLR) premium models—such as the Defender, Range Rover, and Range Rover Sport—had boosted average selling prices (ASPs), but demand for these vehicles is now weakening.

The order book has fallen below pre-pandemic levels, and discounts on Range Rovers are likely to increase.

The brokerage also raised concerns about potential margin declines in both JLR and Tata Motors' Indian passenger vehicle segment.

For the June quarter, JLR reported a 5.4 percent increase in revenue, reaching £7.3 billion, as per reports.

Its operating margin (EBIT) rose by 30 basis points to 8.9 percent, driven by improved volumes, product mix, and material cost reductions.

However, the company has warned of production constraints in the second and third quarters due to an annual plant shutdown and floods affecting a key aluminum supplier.

In the early trade on Tuesday (Oct. 8), Tata Motors shares were trading at Rs 903 on the NSE, down 2.6 percent from the previous close.