Tata Motors share price has continued on its winning streak for fifth sessions in a row, rising by nearly 8%. On Monday, August 18, Tata Motors stock price gained by nearly 3% and is among top gainers on BSE and NSE. The latest rise in Tata Motors is due to buzz that GST rate could fall ahead for automobile sector. Major auto stocks are rallying! However, Tata Motors has been on gaining spree since its Q1 results for FY26 and progress in demerger of 1:1.
Tata Motors Share Price:
At the time of writing, Tata Motors share price gained by 2.61% to trade at Rs 681.90 apiece on BSE, with market cap of Rs 2,51,055.83 crore. In the early trade, the stock zoomed by nearly 3% to hit an intraday high of Rs 684.25 apiece.
However, the stock has been gaining since August 11. The bearish tone in Tata Motors was seen on August 8, where its price level was at Rs 633.70 apiece. Since then, in the past five sessions, Tata Motors stock rallied by a whopping 7.85% taking into consideration the latest intraday high.
GST Rate Cut In Automobiles:
As per reports, the government is expected to reduce GST to 18% from 28% on passenger vehicles and 2-wheelers. The development is highly likely during the Diwali festival.
Currently, all passenger vehicles fall under the 28% GST rate, with an additional compensation cess ranging from 1% to 22%, which increases the overall taxation to as high as 50% in certain segments. For 2-wheelers, GST stands at 28% with no cess for engines up to 350cc and 3% for higher capacities. If the expected tax reduction is approved, it would significantly reduce ex-showroom prices of cars and bikes, especially in the entry-level and commuter segments suffering from affordability concerns, as per Angel Broking's report.
Tata Motors Split:
The much-awaited demerger of a 1:1 ratio is likely to become a reality soon.
In its latest filing, Tata Motors said the final hearing for the scheme of demerger has been concluded today by NCLT and the order is reserved; we aim to complete it this quarter, with 01st October being the Effective Date.
The company is going to demerge its business into two listed entities in due course. One will be focused on commercial vehicles (CV) and the other will emphasise the passenger and JLR cars segment.
As part of the demerger plan, Tata Motors shareholders will get 1 share of TMLCV with a face value of Rs 2 each for every 1 share held in the company. This makes the business split ratio 1:1.
BUY/SELL Tata Motors Share Price?
According to Emkay Global, Tata Motors' Q1 consolidated revenue/EBITDA fell 3.7/37% to Rs1,044bn/97.2bn, below estimates. EBITDAM fell 460bps QoQ to 9.3%, led by unfavourable operational parameters. JLR's FCF was a negative £758mn, on seasonally weak (-£616mn) WC, lower production, and tariff impact. India CV margin was resilient at 12.1% (12.2% in Q4FY25) on a better mix and ASPs. India PV margin fell to 3.9% (Q4FY25: 7.7%) on operating deleverage and commodity inflation. JLR sustained its guidance of 5-7% EBITM, near-zero FCF (on improving volume mix, ASPs, and cost optimization), amid mixed demand (on expected lines - US relatively solid; UK gradually improving; MENA doing well; EU and China struggling).
"JLR expects a gradual demand recovery in FY26. India CV to sustain double-digit margin and drive volumes (3-5% industry growth guidance) amid improving demand outlook and stable ASPs. India PV targets 3-4% EBITDAM rise in 2-3 quarters on a better model mix, operating leverage, and improved realizations. Over the last 5Y, JLR has significantly strengthened its business profile (largely resilient volumes, high profitability), balance sheet (net-cash), to withstand near-term challenges (JLR has undertaken enterprise missions which will save £1.4bn pa). We retain BUY, with an SoTP-based TP of Rs750," said analysts at Emkay Global.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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