Tata Tech‘s share price dipped sharply at open on Thursday after a major brokerage firm initiated coverage on the stock.

What Happened: Goldman Sachs initiated coverage on the Tata Group company with a ‘Sell’ rating and set a target price of ₹900, indicating a potential downside of 12% from its last closing price of ₹1,027.

The global brokerage firm expressed concerns about Tata Tech’s revenue prospects, particularly from its major customer, VinFast, which is expected to see a revenue decline in the near term. The investment bank also highlighted Tata Tech’s high dependence on its anchor customers compared to its peers, which could negatively impact the company’s revenue stability and make it more susceptible to changes in client dynamics.

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The brokerage said that the company’s relationship with Tata Motors and Jaguar Land Rover which accounts for 30% of its sales could make it harder to broaden its client base in the future. The analysts also noted that long-term research and development (R&D) spending in the emerging aerospace segment has been subdued in recent cycles, further contributing to Goldman Sachs’ cautious outlook on Tata Technologies.

After a blockbuster listing, shares of the company have been under pressure. In the last six months, the stock has gone down over 15%. It is currently on a six-straight session losing streak.

Price Action: Tata Tech’s share price was down 1.71% to trade at ₹1,009.95 shortly after market open on Thursday.

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