The sharp upswings and downswings in Tata Group stocks are keeping investors on edge as the corporate battle between Tata Trusts and Tata Sons over the latter’s reappointment of N Chandrasekaran as Chairman intensifies, but analysts remain positive on the fundamentals amid the noise.

Tata Group stocks saw sharp upturns and downturns since last week after Tata Sons approved a fresh five-year extension for Chairman N Chandrasekaran’s tenure and set the ball rolling for the much-awaited IPO of the group holding company, followed by Tata Trusts labelling Chandrasekaran's appointment illegal.

Also read | Tata Sons IPO: How 7 Tata Group stocks performed last week amid IPO buzz

How did the Tata Sons vs Tata Trusts battle ensue?

In a strongly worded letter on Friday, Tata Trusts chairman Noel Tata challenged the validity of the decision. “I write in my capacity as the chairman of Tata Trusts and a nominee director on the board of Tata Sons to place on record my serious disappointment and indeed my strong objection at the conduct of the meeting of the company today,” Tata wrote in the letter, the contents of which were described to an ET reporter.

“I record that I maintain that the vote taken on the captioned matter (reappointment of the chairman) and any resolution claimed to have been passed is null and void ab initio and of no legal relevance, efficacy or effect whatsoever.”

Tata Trusts, which controls 66% of Tata Sons through the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust, passed a resolution in July 2025 seeking to keep the holding company privately owned. The Shapoorji Pallonji Group, Tata Sons’ largest minority shareholder with an 18.37% stake, meanwhile views a listing as the most practical way to unlock value.

Boardroom battle intensifies at Bombay House

Tata Trusts, headed by Noel Tata, may legally challenge Tata Sons board's decision to reappoint N Chandrasekaran as chairman, and seek judicial intervention to maintain the status quo on his tenure, as reported by ET.

Senior advocate Abhishek Singhvi, who was appointed to represent Tata Trusts, on Sunday said he is entering the fray with "sadness and regret" as these issues could not be amicably solved. In a post on X, the lawyer said the fundamental rights of shareholder-owners cannot be nullified in the manner in which they have been.

"Having worked closely with Ratan Tata earlier, being aware of his legacy and not only knowing personally all the principal actors on both sides in the current so-called Tata dispute but also having deep, genuine and abiding respect for and excellent equations with all of them, my first reaction, as I enter the fray as the lead lawyer for one side, is one of sadness and regret that these issues could not be solved amicably," Singhvi said.

Also read | Tata Sons vs Trusts may shift from boardroom to courtroom

Should you buy Tata Group stocks?

The ongoing boardroom developments within the Tata Group may continue to create near-term volatility across its listed companies, but investors should look beyond short-term corporate noise and focus on earnings growth, business fundamentals, cash-flow generation and valuations, said Uttam Kumar Srimal, Deputy Head of Fundamental Research at Axis Direct.

Sunny Agrawal from SBI Securities also said a few fundamentally strong businesses can be considered for a portfolio and accumulated at current levels irrespective of the ongoing developments at the Tata Group.

From a fundamental perspective, Tata Steel remains Axis Direct’s preferred Tata Group stock, given the potential for earnings improvement and the underlying strength of its business, Srimal said.

From the automobile segment, Agrawal from SBI Securities particularly likes Tata Motors’ Commercial Vehicle business. Industry volumes are showing signs of revival, while the government’s planned capex programme provides a structural tailwind for the sector, he said while naming the stock one of his preferred picks.

On the consumption side, the analyst likes all three businesses - Indian Hotels from the hospitality segment, Titan as a play on jewellery, eyewear and accessories, and Tata Consumer, which offers a diversified consumer-staples portfolio spanning categories such as salt and beverages. “We expect these businesses to deliver healthy, mid-teen growth going forward. The recent volatility in Tata Group stocks, therefore, could provide an opportunity to accumulate these businesses from a longer-term perspective,” he said.

Among the smaller companies, Nelco is another business that SBI Securities finds interesting. With a market capitalisation of around Rs 2,500 crore, Nelco operates in the satellite communications space, which the brokerage views as a sunrise industry with significant potential for growth. “We believe Nelco could also be considered as part of the Tata Group portfolio,” the analyst concluded.

Also read | Tata Sons IPO: Why Tata Chemicals may be the biggest beneficiary although Tata Motors, Tata Steel own bigger stake

Disclaimers: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.

Uttam Kumar Srimal, Senior Research Analyst, Axis Securities, is registered with SEBI as a Research Analyst (Reg. No. INH000000297). The analyst has no financial interest of 1% or more in the subject company and no conflict of interest. Neither the analyst, his relative, nor his associate/firm has received any compensation or other benefits from the subject company in the last 12 months.