Tata Motors dips 5.5%, trades as top Sensex, Nifty 50 loser; here's why

Tata Motors share price fell today after the Tata Group company said JLR expects its FY26 Ebit margins to be in the 5-7 per cent range versus 10 per cent previously estimated

Tata Motors share price today: Tata Motors shares dipped 5.5 per cent to ₹672.95 on the National Stock Exchange (NSE) in Monday's intraday trade after the company said it trimmed its financial year 2025-206 (FY26) earnings before interest and taxes (Ebit) margin forecast to 5 per cent to 7 per cent for its British luxury carmaker Jaguar Land Rover (JLR). JLR had, previously, pegged its FY26 Ebit margin at 10 per cent. It had posted Ebit margin of 8.5 per cent in FY25.

 

JLR is a subsidiary of Tata Motors. JLR's performance significantly contributes to Tata Motors' overall revenue.

 

At 10:02 AM, Tata Motors shares were trading 4.5 per cent lower at ₹680.25 on the NSE. The stock was the top loser among the Nifty 50 and BSE Sensex stocks. The counter saw huge trading volumes with a combined 15.86 million shares, cumulatively, changing hands on the NSE and BSE. However, the benchmark indices were up 0.3 per cent at the same time.

 

JLR FY26 guidance cut

 

JLR, on Monday, June 16, 2025, said that it expects FY26 Ebit margin in the range of 5 per cent to 7 per cent. FY26 free cash flow, it said, is expected to be close to zero, while it may improve year-on-year in FY27 and FY28.

 

"JLR is anticipating resilient financial performance in the face of macroeconomic uncertainty. We remain committed to the company's investment plans and the company will grow and protect Ebit going ahead," Tata Motors said in its investor presentation.

 

Looking ahead, JLR expects investment spend to remain at 18 billion euros over a five-year period and funded by operational cash flows.

 

Moody's upgrades JLR ratings

 

That said, Tata Motors has informed the stock exchanges that its overseas luxury arm i.e. JLR has received a credit rating upgrade from Moody's from 'Ba2' to 'Ba1' with a positive outlook. Analysts believe this is in response to JLR turning net debt free as of FY25.

 

Tata Motors FY26 outlook

 

Looking ahead, Tata Motors anticipates sustained growth in the domestic market in FY26 due to its strong fundamentals, despite global headwinds. Demand is expected to rise, driven by higher fleet utilisation, financial support from rate cuts, lower crude oil prices, and a renewed focus on large-scale infrastructure projects. At the same time, the management, in its FY25 annual report, said they remain mindful of the potential impact of new regulations mandating truck cabin air conditioning on vehicle prices.

 

The management said they will continue to closely monitor government infrastructure spending and growth across key end-use segments. With an expansive product portfolio, smart digital solutions and new nameplate launches on the anvil, Tata Motors Commercial Vehicles (CV) is well-positioned to leverage market opportunities and maintain its growth trajectory.

Brokerage views on Tata Motors

 

Analysts at HDFC Securities expect the commercial vehicle (CV) segment to witness growth in FY26, though margins may be impacted in the near term as a result of the safeguard duty on steel. The brokerage firm expects the passenger vehicles (PV) segment volumes to grow 2.5 per cent in FY26, broadly in-line with the industry. The slower electric vehicles (EV) sales and an ageing portfolio will be partially offset by continuing higher growth in the CNG segment (25 per cent of its PV sales) and new refreshes/launches planned in FY26.

 

"We remain cautious in the near term due to the tariff overhang, subdued global macro, an ageing PV portfolio, slowing EV growth amidst higher competition and moderate growth for CVs. We value the company on a SOTP basis and a target price of ₹733," HDFC Securities said.

 

Analysts at Nuvama Institutional Equities, meanwhile, are building in a subdued 3 per cent revenue CAGR over FY25–27E, owing to volume decrease at JLR (3 per cent CAGR) and muted growth in the India CV (2 per cent CAGR) division. In JLR, discontinuance of 'Jaguar' models, loss of market share in the China region and imposition of tariffs in the US region, shall lead to a volume contraction ahead, it said.

 

Furthermore, the brokerage firm reckons a muted performance in the India CV division owing to reasonable utilisation levels with transporters, increasing competition from Railways and a high base. A muted demand outlook and increasing marketing/sales promotion spends would lead to a muted 3 per cent Ebitda CAGR over FY25–27E, Nuvama anticipated.

 

Tata Motors demerger

 

The CV business is likely to exit some market indices, like the Nifty50, post the demerger. This may impact some passive flows, but analysts at HSBC Global Research believe CV will continue to attract long-term positive investor interest as it is a relatively linear business, compared to the PV business, and has market leadership with dominant market share. The company showcased its revised brand positioning for the demerger and the focused growth areas.