Post by : Rameen Ariff

Tata Motors Ltd began October on a positive note, with its stock surging 5.5% after the company announced the record date for the demerger of its Commercial Vehicles (CV) business. The move is part of a major restructuring plan that separates Tata Motors’ commercial and passenger vehicle segments to create focused businesses.

Earlier in August, the Tata Motors board approved the demerger of its commercial vehicle business into a new entity called Tata Motors Commercial Vehicles (TMLCV). Simultaneously, the company’s passenger vehicle (PV) segment will continue under Tata Motors Passenger Vehicles (TMPV).

Following this decision, Tata Motors fixed October 14, 2025, as the “record date”. On this date, shareholders of Tata Motors will be identified and allotted shares of TMLCV in a 1:1 ratio, marking a crucial milestone in the company’s corporate restructuring.

However, after the initial rally, Tata Motors shares have seen a correction. In the four trading sessions following the October 1 announcement, the stock has slipped by nearly 7.5% from its high of ₹740, and is currently trading around ₹688, hovering close to its long-term 200-Day Moving Average (200-DMA), a key technical support level.

Technical Overview

Analysts suggest that Tata Motors is in a consolidation phase, with the stock broadly trading between ₹600 and ₹740 over the past six months, except for a sharp dip to ₹536 in April 2025. At present, technical charts indicate:

• Likely upside target: ₹821

• Downside risk: ₹600

• Support levels: ₹667 and ₹620

• Resistance: ₹740

The stock is attempting to surpass its 200-DMA, which it has been testing for over a month. Despite the recent ups and downs, the stock remains 42% below its peak of ₹1,179 recorded in July 2024, highlighting the ongoing recovery challenges.

Near-Term Outlook

The near-term bias for Tata Motors stock remains cautiously positive as long as it holds above ₹667. A fall below this level may trigger a retest of the lower band of its trading range, potentially bringing the stock down to ₹620–₹600.

On the upside, Tata Motors needs to break and trade consistently above ₹740 to aim for the 100-Week Moving Average (100-WMA) at ₹821. Although the stock has not yet fully recovered from the 42% drop from its peak, analysts suggest a sharp pullback or rebound is possible depending on market sentiment and investor response to the CV demerger.

Strategic Implications

The CV demerger is a significant step for Tata Motors, as it allows the company to:

• Unlock shareholder value by separating high-growth segments

• Provide focused operational management for both CV and PV businesses

• Align business strategy with long-term growth and profitability

Investors are closely watching the record date on October 14, as it will determine the allocation of shares for TMLCV. The market is also keeping an eye on the stock’s technical levels, as they will influence near-term trading momentum.

In summary, Tata Motors stock is navigating a period of consolidation, influenced by corporate restructuring, technical levels, and market sentiment. With the CV demerger approaching, investors may see increased volatility, but the stock also presents upside potential if it can breach key resistance levels.

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