Tata Investment Corp shares slide nearly 25% since stock split. Right time to buy?

Tata Investment Corporation shares have been on a slippery slope since turning ex-split on October 14, tumbling nearly 25% as profit-booking swept through the counter. The sharp sell-off comes after a blistering pre-record date rally and growing unease over the deepening turmoil within the Tata Group, leaving investors questioning whether the recent correction marks a buying opportunity or the start of a deeper slide.

Ajit Mishra, SVP at Religare Broking, noted that Tata Investment Corp is currently going through a cooling-off phase after an overextended up move. “The stock has retraced towards the Rs 800 zone, aligning closely with its short-term moving average – the 20 DEMA,” Mishra said. “The broader trend structure remains positive as the price still trades above the 50-day and 200-day moving averages, both sloping upward. However, near-term sentiment appears corrective, with profit-booking visible at higher levels. Sustaining above Rs 760 will be crucial; a breach below this could extend the decline towards Rs 680–700. On the upside, Rs 860–900 may act as immediate resistance.”

“The stock’s sharp surge has led to overbought setups. Hence, we have witnessed profit booking as much of the positivity was already factored in the price,” Ruchit Jain, Vice President of Technical Research at Motilal Oswal Financial Services, told ETMarkets. “The immediate support for the stock is placed around its weekly 20 EMA in the Rs 770–760 zone.”

Tata Group strife weighing on stock?

For Tata Investment Corp, the broader nervousness around the group’s leadership crisis may be amplifying selling pressure.

The crisis inside Tata Trusts — the charitable foundation that controls a majority stake in Tata Sons — has laid bare deep divisions just a year after the passing of Ratan Tata.

At the heart of the dispute is a power struggle between Noel Tata, current chairman of Tata Trusts and half-brother of Ratan Tata, and long-time Tata confidant Mehli Mistry. On October 28, a crucial vote saw Mistry ousted from the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trust, The Economic Times reported, a move that exposed fissures in the conglomerate’s long-standing consensus-driven governance model. The rift has split the upper echelons of the group into two camps — one backing Noel Tata’s leadership, and another supporting Mistry.

The episode has drawn uncomfortable parallels to the 2016 ouster of former Tata Sons chairman Cyrus Mistry, reigniting questions over control and succession within India’s largest business house. This latest infighting has arrived at a precarious moment for the group, which is already grappling with operational challenges including an Air India crash, a major cyberattack on Jaguar Land Rover, and unrest within Tata Consultancy Services.

The fallout has been visible on Dalal Street. The collective market capitalization of Tata Group companies has reportedly dropped over $70 billion over the past year, as investor unease mounts over governance uncertainty and its potential impact on decision-making.

Q2 Performance Snapshot The company reported a modest set of financial results earlier this week. Tata Investment Corp posted a 19.3% year-on-year rise in consolidated net profit to Rs 148 crore for the September quarter, compared with Rs 124 crore in the same period last year. Revenue from operations grew 8.5% to Rs 154 crore from Rs 142 crore a year ago.

Operationally, the company maintained robust margins — its EBITDA rose 8.2% to Rs 144 crore, with an EBITDA margin of 93.3%, only marginally lower than 93.5% a year earlier.

Despite steady fundamentals, investors appear focused on near-term headwinds. Between the unwinding of a massive surge before splitpost-split and the governance storm brewing at the Tata Group’s apex, sentiment around Tata stocks including Tata Investment Corp remains fragile.

Technical experts believe the stock could find stability near Rs 760 if broader sentiment improves, but warn that sustained weakness below this level may trigger a fall.

Tata Investment Corp shares ended the Thursday session 1.35% lower at Rs 801 per share to extend losses for a fourth session in a row.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)