The shares of this leading Tata Group-backed company plunged by 5.5 percent on Monday, after its JLR (Jaguar Land Rover) unit reported muted growth in this financial year and expects headwinds shortly.
With a market capitalization of Rs 2,48,480 crores, the shares of Tata Motors Ltd are currently trading at Rs 675 per share, down by 42.41 percent from its 52-week high of Rs 1,179.05 per share. Over the past five years, the stock has delivered a return of 563.76 percent.
Tata Motors’ UK-Luxury car division, JLR, expects an EBITDA margin between 5-7 percent for FY26 as compared to its FY25 margin of 8.5 percent. It targeted a margin of 10 percent over the next year previously. Additionally, the company expects its free cash flow to decline to close to zero in FY26, down from a value of Rs 17,493 crores in FY25.
JLR raised some significant risks to profitability, including the semiconductor shortage, supplier issues, rises in theft in the UK, US tariffs, and of course, transitioning EVs.
In China, while they continue to outperform the overall market, premium and luxury vehicle sales were down, even with JLR’s performance, by 15 percent. In terms of US tariffs, JLR suspended shipments in April while also diverting JLR vehicles from the US and shipping them to higher profit markets. However, the company has assured that it will continue to strive towards profitability and expects its business margins to improve YoY for FY27 and FY28.
Financial Highlights
The company reported a revenue of Rs 4,39,695 crore in FY25, up by 1.30 percent from its FY24 revenue of Rs 4,34,016 crores. However, it reported a net profit decline of 11.50 percent to Rs 28,149 crore in FY25 from Rs 31,807 crores in FY24.
The stock delivered an ROE and ROCE of 28.08 percent and 19.97 percent respectively, and is currently trading at a P/E of 8.91x as compared to its industry peers of 30.54x.
Written by Satyajeet Mukherjee
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