Tata Motors shares up 16% in a month, still down 4% year-to-date; should you add?

Shares of Tata Motors Ltd continued their strong pullback for the fourth consecutive session on Monday. The stock, which slipped to a one-year low of Rs 542.55 on April 7 last month, was last seen trading 1.76 per cent up at Rs 721. At this price, it has recovered 15.95 per cent on a monthly basis. Despite the mentioned uptick, the scrip is still down 3.78 per cent year-to-date (YTD).

Analysts believe Tata Motors would benefit from the Free Trade Agreement (FTA) signed between India and the United Kingdom (UK). Prime Minister Narendra Modi announced the conclusion of the FTA with London, along with a Double Contribution Convention. This treaty implies that automotive tariffs will fall from 100 per cent to 10 per cent under a quota, as per the FTA.

On the level-specific front, Tata Motors shares may climb up to Rs 820 levels in the near term. An analyst suggested adding the counter on dips.

"We value Tata Motors at Rs 800. After the pricing on international cars is going to come down under the UK FTA, we are going to see JLR being one of the biggest beneficiaries. I think things are going to look pretty good out there and Tata Motors will definitely do well going ahead," Vinit Bolinjkar, Head of Research at Ventura Securities, told Business Today.

"For the near-term purpose, I would say Rs 640 is the support and it's coming out of its consolidation. The stock can go up to Rs 800-820 levels," said Vaishali Parekh, Vice-President (Technical Research) at Prabhudas Lilladher.

"Valuations look attractive from a medium- to long-term view. Those holding should continue with their positions and accumulate it on dips," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

The automaker attracts around 67 per cent of its revenues from JLR while JLR gets nearly 27 per cent volume from China. Tata Motors recently announced that its shareholders have approved the company's plan to split its automotive business into two listed entities, separating its passenger and commercial vehicle businesses. This proposal will give shareholders equal stakes in both listed entities.

As of March 2025, promoters held a 42.58 per cent stake in the Tata Group company.