Tata Motors share price dips as top executives exit ahead of demerger

Stock market today: Amid reports of unhappy top executives leaving Tata Motors Ltd ahead of the demerger, Tata Motors’ share price witnessed strong selling pressure on Friday. Tata Motors’ share price opened lower at ₹686 apiece on the NSE and finished at ₹672.40 per share mark after hitting an intraday low of ₹671.10 apiece.

Tata Motors’ demerger details

Tata Motors Ltd. announced the business demerger plan in March 2024. The auto major is undergoing a talent mapping exercise to bifurcate top executives handling common business operations and allocate them to either company. As per the Mint report, after the announcement of Tata Motors demerger, the executive search firm Egon Zehnder and consultants Boston Consulting Group and McKinsey were appointed to talent map and chalk out the finer details of the split.

This exercise left some of Tata Motors Ltd’s senior executives unhappy with their new posts, which could be the reason for some of the exits, a consultant working with Tata Motors said on anonymity.

“After the split was announced, if you were holding a senior post for both businesses, now you will hold for either one. The team size and the portfolio will get reduced. Hence, some of the exits,” this executive said.

These include Biswaroop Mukherjee, who was head of human resources for the commercial vehicles business unit; Anurag Mehrotra, vice-president for international business and strategy; Vinay Pant, chief marketing officer–passenger vehicles; Vinay Pathak, head of product planning and program management–commercial vehicles; Sampada Inamdar, head of training and development; and Devendra Katiyar, chief safety officer.

Ashish Tandon, senior general manager (small commercial vehicles), also quit during this period.

Two of these executives have joined Tata Motors’ rivals. Mehrotra now heads JSW MG Motor India as its managing director, and Tandon is the global head of customer excellence at Euler Motors. Mukherjee has since joined Aker Solutions as vice president of people and transformation.

Tata Motors share price target 2025

Asked about the fundamentals of Tata Motors, Sagar Shetty, Research Analyst at StoxBox, said, “Tata Motors Ltd is a key automobile player in the global and domestic landscape, with a comprehensive portfolio. With a market share of approximately 12%, the company ranks third in position with an early mover advantage in the EV space. The future looks bright, particularly with strong demand for Range Rover and the anticipated positive impact of Jaguar’s relaunch as an EV. Additionally, the company is well-positioned to benefit from the recovery of the CV industry in the short term, enabling the company to cater to diversified customer demand. Moreover, the company has significantly reduced its debt obligation, with the Indian business returning to a net cash position of ₹700 crore, which aligns with its deleveraging strategy.”

The StoxBox expert said the company has also generated a strong FCF, ensuring that future investments are well-funded. The upcoming merger will enable the company to enhance its operational efficiency and unlock value for shareholders by allowing each segment to focus on its core competencies, making decision-making in the respective segment more agile and efficient.

Maintaining a positive outlook for Tata Motors shares, Sagar Shetty of StoxBox said, “The demerger will also help participants better assess the company’s financial performance based on each division’s performance. In addition, we believe the demerger will enable the company to streamline its focus on the respective industry, being able to enforce the necessary strategies to capture market share in the respective industry. With the muted demand witnessed in H1FY25, we believe the demerger comes in at a good time, with varying strategies required to create a stronger foothold in the CV and PV space. We thus maintain a positive outlook for the company, believing that the demerger will help unlock value for the stakeholders.”

Expecting a trend reversal in Tata Motors shares, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said, “Tata Motors share is hovering around the crucial ₹659 level, a strong support zone on the weekly chart. The recent selling pressure has weakened, with diminishing volumes indicating exhaustion. While both the weekly and daily structures remain bearish, signs of bottoming out are emerging. A breakout above ₹695 could trigger fresh bullish momentum, potentially pushing the stock towards ₹750.”

The Lakshmishree Investment and Securities expert said traders should watch for volume confirmation and broader market sentiment before taking positions. If Tata Motors sustains above this resistance, it could signal a trend reversal, offering an attractive opportunity for investors eyeing a recovery rally.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.