Tata Motors Share Price Declines as Jaguar Land Rover Suspends US Shipments

Market Performance

Shares of Tata Motors dropped sharply in early trading on April 7, 2025. The stock fell by over 8% on the National Stock Exchange (NSE), reaching ₹561.00. During the session, it traded between ₹535.75 and ₹570.30. Over the past 12 months, the stock has declined by approximately 40%, in contrast to the Nifty 50 index, which rose around 1% during the same period.

Jaguar Land Rover Pauses US Shipments

Tata Motors’ UK-based subsidiary, Jaguar Land Rover (JLR), announced it will temporarily stop vehicle shipments to the United States starting in April 2025. The move comes in response to a 25% tariff on imported automobiles introduced by the US administration. JLR stated it is reviewing strategies to navigate the impact of the new tariffs.

Company Financials and Operations

Jaguar Land Rover plays a main role in Tata Motors’ global operations. In FY24, JLR sold over 400,000 units worldwide. Of this, approximately 23% were sold in the United States, making it a crucial market for the brand.

Financial Overview

• Revenue: Over 400,000 units sold globally in FY24
• EBITDA: FY26 projections lowered by 15%
• EBITDA Margins: Expected to decline from 9% in FY25 to 7% in FY26/27
• Net Profits: Likely to face pressure due to reduced volumes and profitability
• Free Cash Flow: Forecasted to stay positive despite operational headwinds

Outlook

The US market contributed over one-fifth of Jaguar Land Rover’s total revenue last year. The pause in shipments is expected to impact the company’s short-term performance. While cost control measures and pricing adjustments are possible responses, their effects are unlikely to be immediate. Revenue and profitability are expected to be affected in the near term.

Summary

Tata Motors' share price declined significantly after its subsidiary Jaguar Land Rover decided to halt US exports in response to new tariffs. The US market’s importance to JLR and the anticipated decline in operating margins and volumes are expected to weigh the company’s short-term financial outlook.