Tata Motors Shares Fall 5% After JLR Sees Lower Margins For FY26; Key Points

Last Updated:June 16, 2025, 10:09 IST

Shares of Tata Motors Ltd., the leading manufacturer of passenger and commercial vehicles, declined by as much as 5%

Shares of Tata Motors Ltd., the leading manufacturer of passenger and commercial vehicles, declined by as much as 5% on Monday, June 16, after its subsidiary, Jaguar Land Rover (JLR), issued a subdued outlook for the current financial year, falling short of last year’s performance expectations.

Jaguar Land Rover (JLR), the UK subsidiary of Tata Motors, has provided a muted outlook for FY26, forecasting an EBIT margin between 5% and 7%, a decline from the 8.5% margin it achieved in the previous fiscal year.

In FY25, JLR generated a robust free cash flow of £1.5 billion. However, the company now expects that figure to fall “close to zero” in the current financial year. Despite this short-term weakness, JLR management is optimistic about the medium term, aiming to improve free cash flow from FY27 onward and targeting a return to a 10% EBIT margin—though no specific timeline has been disclosed.

JLR remains a critical driver of Tata Motors’ financial performance, contributing 71% to the company’s revenue and 80% of its overall profit in FY25. The average revenue per unit stood firm at over £70,000 on a year-on-year basis.

On trade policy, JLR stated it continues to engage with the Trump Administration. The UK-US trade agreement is expected to reduce tariffs from 27.5%, though tariffs on imports from Slovakia remain unchanged.

Despite a challenging environment for the premium automotive segment in FY25, JLR outperformed the broader market and retained its top position in the premium category in May. The company is also eyeing growth in China, with plans to license its Freelander model to its joint venture in the region. The first units are expected to be launched in the second half of FY26.

Following the subdued guidance, Tata Motors’ shares dropped 4.6% on Monday to Rs 679.65, making it the biggest loser on the Nifty 50 and among the top decliners on the Nifty 500.

Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More

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