Tata Motors shares slump 4% after September sales decline 11%

Tata Motors shares fell over 4% to an intra-day low of Rs 925.40 after the company’s total sales declined 11% on year in September 2024. 

The Tata Group company reported a significant decline in its domestic and international sales for the second consecutive quarter. Tata Motors posted a total sales of 215,034 vehicles in Q2 FY25, down from 243,024 units in the same period a year ago, a fall of 11% year-on-year.

Furthermore, the automaker’s domestic sales declined by 15% on year to 69,694 units in September 2024. Domestic commercial vehicle sales plummeted to 28,631 units, a fall of 23% on year, in September 2024 compared to 37,214 units it reported in the same month a year ago.

“Slowdown in infrastructure project execution, reduction in mining activity, and an overall drop in fleet utilization due to heavy rains resulted in the HCV (heavy commercial vehicle) segment record a 25% YoY decline in Q2 FY25 and the ILMCV segment register a 11% decline,” said Girish Wagh, Executive Director, Tata Motors.

He further added that the company expects a gradual improvement in small commercial vehicles and pickups (SCVPU) business as it initiates financing first-time users. 

“As we move forward, with the rains easing, increased infrastructure spending, and the arrival of the festive season boosting consumption, we anticipate demand to pick up gradually in Q3, led by ILMCV and Buses, followed by M&HCV and SCVPU,” Wagh added. 

“The PV industry in Q2 FY25 saw more than 5% decline in retails (Vahan registrations) compared to Q2 FY24 driven by slow consumer demand and seasonal factors. In addition, Electric Vehicle sales in the personal segment were affected by the lapse of registration and road tax waivers in key states. Fleet EV sales continued to remain impacted due to the lapse of FAME II and the non-inclusion of the fleet segment in the PM-eDRIVE scheme,” said Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.

Tata Motors Vs Nifty 

Shares of Tata Motors have fallen 4% in the last five trading days and 14% in the last month. The automaker’s stock has erased 7.5% of investors’ wealth in the last six months. However, the stock has risen more than 50% in the last one year. 

To compare, the benchmark index Nifty 50 has fallen 3% in the last five days. However, it has given a return of 0.37% in the last one month. The index has risen 13% in the last six months and 30% in the past year.