Tata Motors Shares Plummet Amidst JLR's Muted Outlook for FY26

Tata Motors shares have witnessed a significant decline in recent days, primarily due to the cautious outlook from its UK-based luxury subsidiary, Jaguar Land Rover (JLR), for the financial year 2026. JLR expects its EBIT margins to range between 5% and 7%, down from the 8.5% margin reported in the previous financial year. This reduction in profitability has led to a sell-off in Tata Motors' shares, with the stock falling by as much as 5% on June 16, making it one of the top losers on the Nifty 50 index[1][3].

Additionally, JLR's free cash flow is expected to be 'close to zero' in FY26, compared to £1.5 billion in the previous year. This financial projection has further dampened investor sentiment, contributing to the decline in Tata Motors' share price[1]. Brokerages like Jefferies have also downgraded their target price for Tata Motors to Rs 600 from Rs 630, citing lower margins and reduced EPS for FY26-28[2].

As of June 16, Tata Motors' share price was recorded at Rs 686.65, marking a 3.57% drop from the previous closing price of Rs 715.35[4]. The company's market capitalization currently stands at Rs 2,62,139 crore. Despite the recent downturn, Tata Motors has outperformed its five-year average return on equity (ROE) with 23.96% in the year ending March 31, 2025[4].