Tata Motors Shares Drop Ahead of Demerger Record Date

Investors in Tata Motors are facing a challenging period as the company’s share price has declined for six consecutive sessions, closing at ₹679.15 on the National Stock Exchange (NSE) on Friday. This decline, approximately 5.50% from its previous value of ₹718.35, comes as the record date for the company’s demerger approaches on October 14, 2025.

The upcoming demerger will lead to the creation of two distinct entities: Tata Motors Commercial Vehicles (TMLCV) and Tata Motors Passenger Vehicles (TMPV). According to Khushi Mistry, a Research Analyst at Bonanza, TMLCV will emerge as India’s largest commercial vehicle manufacturer, boasting a market share of 37.1%. Despite a revenue decline in the first quarter of FY26, TMLCV maintained a healthy EBITDA margin of 12.2% due to operational efficiencies. The segment is also expected to benefit significantly from the recent acquisition of €3.8 billion Iveco, positioning it as the world’s fourth-largest truck manufacturer for vehicles with a payload exceeding six tonnes.

Mistry noted that the domestic commercial vehicle industry is forecasted to grow by 3% to 5% in FY26, driven by demand from infrastructure projects and the e-commerce sector. On the other hand, the TMPV segment will encompass the passenger vehicle business, including electric vehicles and operations related to Jaguar Land Rover. The passenger vehicle sector is anticipated to grow by 8–10% in the latter half of FY26, fueled by new product launches and a robust demand for SUVs and electric vehicles, which together represent 45% of its revenue.

As the share price outlook remains uncertain, Drumil Vithlani, a Technical Analyst at Bonanza, highlighted recent trends indicating significant selling pressure prior to the demerger event. The stock is trading below the 20-week Exponential Moving Average (EMA) of ₹688.46, which currently serves as a resistance level. Momentum indicators suggest the possibility of consolidation or slight weakness, but a full reversal is not anticipated. Given the volatility expected surrounding the demerger, Vithlani advises investors to hold onto their existing shares and refrain from making new investments until greater clarity emerges post-event.

Vithlani also pointed out that if the stock remains above the key support level of approximately ₹669 and manages to close above the EMA range of ₹688–690, a short-term recovery could be in sight, potentially reaching targets of ₹720 and then ₹736–740, which represents a strong resistance zone.

Investors are encouraged to consider expert insights before making any financial decisions, as the views expressed in this analysis reflect those of individual analysts and not of the reporting publication.