Current Rating Overview
MarketsMOJO assigned Tata Motors Passenger Vehicles Ltd a 'Sell' rating on 08 August 2025, reflecting a decline in the Mojo Score from 53 to 41. This rating indicates a cautious stance towards the stock, suggesting that investors may want to consider reducing exposure or avoiding new positions at this time. The 'Sell' grade is derived from a comprehensive evaluation of the company's quality, valuation, financial trend, and technical outlook.
How the Stock Looks Today: Quality Assessment
As of 11 February 2026, Tata Motors Passenger Vehicles Ltd maintains a good quality grade. This suggests that the company possesses solid operational characteristics and a credible business model within the automobile sector. Despite challenges, the firm continues to demonstrate resilience in its core passenger vehicle segment. However, quality alone does not offset other concerns impacting the overall rating.
Valuation Perspective
The stock currently holds an attractive valuation grade, signalling that the market price may be undervalued relative to its intrinsic worth or peer group. This could present a potential opportunity for value-oriented investors. Nevertheless, valuation attractiveness is tempered by other negative factors, which investors should weigh carefully before making decisions.
Financial Trend and Performance
The financial trend for Tata Motors Passenger Vehicles Ltd is negative as of 11 February 2026. The company has reported losses for three consecutive quarters, with the latest quarterly PAT standing at a significant deficit of ₹1,889 crore, reflecting a steep decline of 160.1% compared to the previous four-quarter average. The return on capital employed (ROCE) is deeply negative at -36.73%, indicating poor capital efficiency and profitability challenges. Additionally, cash and cash equivalents have dwindled to ₹27,592 crore, underscoring liquidity pressures.
Moreover, the company carries a high debt burden, with an average debt-to-equity ratio of 1.57 times, which raises concerns about financial leverage and risk. These factors collectively contribute to the negative financial grade and weigh heavily on the current rating.
Technical Outlook
The technical grade is assessed as mildly bearish. While the stock has shown some short-term gains, including a 1-day increase of 1.5% and a 1-month rise of 8.65%, it has underperformed over longer periods. The stock has declined by 8.09% over the past year and posted negative returns of 5.53% and 4.73% over the last three and six months respectively. This mixed technical picture suggests caution for traders and investors relying on price momentum.
Stock Returns and Market Performance
As of 11 February 2026, Tata Motors Passenger Vehicles Ltd has delivered a 4.75% return year-to-date, reflecting some recovery in recent months. However, the stock’s one-year return remains negative at -8.09%, and it has underperformed the broader BSE500 index over the last three years, one year, and three months. This underperformance highlights ongoing challenges in regaining investor confidence and market share.
Implications for Investors
The 'Sell' rating from MarketsMOJO suggests that investors should exercise caution with Tata Motors Passenger Vehicles Ltd at present. While the company’s valuation appears attractive and its quality remains good, the negative financial trend and bearish technical signals indicate underlying risks. Investors should carefully consider the high debt levels, consecutive quarterly losses, and subdued returns before committing capital.
For those holding the stock, it may be prudent to reassess portfolio exposure in light of these factors. Prospective investors might prefer to monitor the company’s financial recovery and operational improvements before initiating new positions.
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Sector and Market Context
Tata Motors Passenger Vehicles Ltd operates within the automobile sector, a space currently facing multiple headwinds including supply chain disruptions, rising input costs, and evolving consumer preferences towards electric vehicles. The company’s large-cap status places it among the key players in the industry, but it faces stiff competition and margin pressures.
Despite these challenges, the company’s attractive valuation may reflect market expectations of a turnaround or recovery in the medium term. However, investors should remain mindful of the ongoing financial strain and monitor quarterly results closely for signs of improvement.
Summary
In summary, Tata Motors Passenger Vehicles Ltd is rated 'Sell' by MarketsMOJO as of the rating update on 08 August 2025. The current analysis as of 11 February 2026 highlights a company with good quality and attractive valuation but burdened by negative financial trends and a mildly bearish technical outlook. The stock’s recent returns have been mixed, with short-term gains offset by longer-term underperformance.
Investors should approach the stock with caution, considering the high debt levels, consecutive losses, and subdued capital efficiency. While the valuation may entice value investors, the overall risk profile suggests a conservative stance until clearer signs of financial recovery emerge.
Looking Ahead
Going forward, key indicators to watch include quarterly profitability, debt reduction efforts, cash flow improvements, and technical momentum shifts. Any positive developments in these areas could alter the stock’s outlook and potentially improve its rating in the future.
For now, the 'Sell' rating serves as a prudent guide for investors to carefully evaluate their exposure to Tata Motors Passenger Vehicles Ltd within the broader automobile sector landscape.
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