Tata Motors’ shares fell 6.8% after reporting weaker-than-expected Q3 results and cutting its FY25 guidance for Jaguar Land Rover. Analysts suggest caution with mixed brokerage opinions on the stock.
On January 30, 2025, shares of Tata Motors faced significant pressure, trading 6.8% lower at ₹701.40 on the Bombay Stock Exchange (BSE). This decline followed the company’s announcement of a weaker-than-expected third-quarter (Q3) result and a downward revision in the full-year guidance for its luxury car segment, Jaguar Land Rover (JLR). The stock had briefly touched a low of ₹684.25 before recovering slightly.
Tata Motors, a leading Indian automotive manufacturer, reported a 22% year-on-year (YoY) drop in profit, totaling ₹5,451 crore, falling short of analysts’ expectations. The company had been projected to post a profit of ₹6,791 crore, according to a survey by ET Now. Despite the profit decline, revenue from operations grew by 3% YoY, reaching ₹1.13 lakh crore.
The company also lowered its FY25 revenue guidance for JLR, now forecasting GBP 29 billion, down from its previous target of GBP 30 billion. Additionally, Tata Motors revised its return on capital employed (ROCE) estimate to 20% from 22%. The company maintained its EBIT margin target above 8.5% and a free cash flow (FCF) target of GBP 1.3 billion.
This news led to mixed reactions from brokerage firms, with Jefferies downgrading the stock to ‘Underperform’ from ‘Buy’. Jefferies reduced its target price for Tata Motors to ₹660 from ₹930, citing concerns over weak JLR demand in China and Europe, rising customer acquisition costs, and higher warranty expenses. This downgrade marked Jefferies’ first downgrade on the stock in 3.5 years.
Investors are advised to closely monitor the developments surrounding Tata Motors’ operations, particularly in the JLR segment, and assess the potential impact of these factors on the company’s financial performance moving forward.
