Why Tata Motors Shares Are Falling: What You Need to Know
Shares of Tata Motors declined sharply by over 5.5% in early trade on Monday, emerging as the top loser on both the Sensex and Nifty 50. The fall comes after the company shared a weaker-than-expected margin outlook for its UK-based luxury car subsidiary Jaguar Land Rover (JLR).
This has raised a key question among investors and market watchers: Why is Tata Motors share falling today?
The answer lies in the company’s cautious guidance for FY26 earnings before interest and taxes (EBIT) margins of 5% to 7% for JLR — significantly lower than its earlier goal of 10% and down from 8.5% reported in FY25. The lower profit forecast comes amid growing uncertainty over US tariffs on foreign-made vehicles, a move that directly impacts JLR, which has temporarily paused its shipments to the US following a steep 25% import duty imposed under Donald Trump’s trade policy.
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Adding to the investor concerns, JLR has also projected that its free cash flows could drop to near zero in FY26, from a healthy £1.5 billion in FY25. While the management remains hopeful about an improvement in FY27 and FY28, the short-term outlook has triggered negative sentiment.
JLR plays a crucial role in Tata Motors’ financials, contributing about 71% of total revenue and nearly 80% of consolidated profitability. A weaker performance from JLR, therefore, directly weighs on the group’s overall earnings outlook.
Amid this backdrop, Tata Motors shares hit a low of Rs 672.75 on the BSE, down from Rs 1,179.05, its 52-week high — reflecting a 43% decline. Over the past one year, the stock has fallen by 31.40%, and is currently down 9% year-to-date (YTD).
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Despite a strong Q4 performance where the company reported a 17% year-on-year rise in net profit to Rs 4,480 crore, concerns over JLR’s FY26 performance and global trade headwinds have taken centre stage.
For now, the stock may remain under pressure as investors await more clarity on JLR’s performance and the broader impact of global tariffs on the company’s bottom line.
Disclaimer: This post is for general informational purposes only. It does not constitute financial advice. Please consult a qualified professional before making financial decisions.
