Shares in Tata Motors tumbled after its latest quarterly results revealed a sharp profit decline amid rising costs, supply disruptions, and challenging conditions for Jaguar Land Rover, despite ongoing growth in India’s passenger vehicle segment.
Tata Motors Passenger Vehicles fell sharply on Friday after the automaker posted a weaker-than-expected first-quarter update, with investors focusing on pressure in Jaguar Land Rover and mixed signals from the domestic business.
The company said after market hours on Thursday that net profit for the quarter ended June dropped 78.54% to ₹859 crore from ₹4,003 crore a year earlier. Revenue from operations rose 9% to ₹95,799 crore, but the improvement was not enough to offset the hit from supply-chain disruption, higher commodity costs and weaker performance at JLR. On the NSE, the stock was down as much as 5.7% intraday.
JLR wholesales declined 9.2% year on year, reflecting temporary supply constraints that included a fire at a key component supplier, tensions in the Middle East and the planned run-down of the Jaguar brand. In India, the passenger vehicle business delivered stronger growth, with revenue rising 65% and volumes up 46%, while electric vehicle sales jumped 112%. Even so, elevated raw material and foreign-exchange costs weighed on margins.
Brokerages remained cautious despite the domestic momentum. Motilal Oswal said JLR’s earnings were better than it had expected, but still pointed to pressure from higher vehicle, marketing, warranty and emissions-related costs. The firm kept a Sell rating and a ₹310 target price. Jefferies also flagged a series of headwinds at JLR, including tougher competition, heavy discounting, warranty costs and an ageing model range, while saying India’s improving market share was unlikely to fully offset the strain from the luxury unit.
Jefferies added that Tata’s share in India has risen over several years and that the company’s new Sierra SUV is receiving a positive response, but it maintained an Underperform rating with a ₹300 target. Motilal Oswal, meanwhile, warned that JLR’s margin pressure could persist, with demand softness in Europe and China and tariff uncertainty in the US adding to the challenge.
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