The investment bank said that Tata's Jaguar Land Rover's product cycle was entering a slow phase.
Morgan Stanley has lowered its target price on Tata Motors to Rs 240 from Rs 291 and maintains its "equal-weight" rating on the stock.
The investment bank said that Tata's Jaguar Land Rover's product cycle was entering a "slow phase," while India's medium and heavy commercial vehicle cycle was "weak", and the environment for luxury cars was becoming "more competitive."
Morgan Stanley added that although volumes were "holding up well" in the key China market, its survey showed the "underlying trend in terms of discounts, inventory, and customer traffic is deteriorating."
Tata Motors shares were last up 0.9 per cent at Rs 242.15.
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