Tata Motors Stock Dips as Brokerages Raise Concerns Over JLR’s Future
Tata Motors Shares React to Mixed Signals
Tata Motors shares saw some volatility on Wednesday after the company reported its March quarter earnings, which exceeded expectations. However, the stock ultimately dipped as several brokerages downgraded their ratings on Tata Motors, citing concerns about the future performance of its luxury vehicle unit, Jaguar Land Rover (JLR).
JLR: Cautious Outlook Despite Recent Success
JLR managed to achieve its cash flow guidance for the fiscal year 2025, marking its 10th consecutive profitable quarter. This is undeniably good news for the company. However, CLSA, one of the brokerages that still holds an optimistic view on Tata Motors, expressed caution about demand in the year 2026 due to potential tariffs and changing economic conditions. Despite these uncertainties, CLSA believes the luxury passenger vehicle market will remain relatively stable.
Jefferies Turns Bearish on Tata Motors
On the other hand, Jefferies took a more pessimistic stance, downgrading Tata Motors to “underperform.” They anticipate a challenging year ahead for JLR, citing factors like US tariffs, rising competition in China, and increased customer acquisition costs. Jefferies also pointed to a slowdown in the Indian commercial vehicle market and growing competition in the electric vehicle (EV) space as additional concerns. As a result, they lowered their EBITDA estimates for Tata Motors for the years 2026 and 2027.
Citi Suspends Rating, Kotak Turns Sell
Citi, which has suspended its rating on Tata Motors, believes the company’s India commercial vehicle business is showing positive signs, but the passenger vehicle segment, particularly the EV segment, may face some near-term headwinds. Meanwhile, Kotak Institutional Equities downgraded their rating to “sell” from “reduce,” citing similar concerns about JLR’s near-term outlook and market share losses in both the India CV and PV businesses.
Market Reaction and Analyst Sentiment
Tata Motors shares initially dropped by 3% on Wednesday before recovering some ground, ultimately closing at ₹697.7. Despite the mixed signals, analysts remain divided on the company’s future prospects. Out of 34 analysts covering Tata Motors, 19 have a “buy” rating, nine hold a “hold” rating, and six have a “sell” rating.
