India’s Passenger Cars and Utility Vehicles sector is witnessing steady growth, with domestic sales reaching 4.34 million units in FY25, a 2.6 percent year-on-year increase, despite challenges like high inventory levels and sluggish urban demand. Valued at Rs 3.5 trillion in 2025, the market is projected to grow at a CAGR exceeding 4 percent, driven by rising disposable incomes and government initiatives promoting electrification
Price movement
With a market capitalization of Rs 2.26 lakh crore, the shares of Tata Motors Ltd closed at Rs 615.80 per share, decreased around 6 percent as compared to the previous closing price of Rs 671.80 apiece.
Matter Explanation
Global brokerage CLSA downgraded the stock to an “outperform” rating and reduced its price target by 18 percent to Rs 765 from Rs 930. Despite the downgrade, the revised target still indicates a potential upside of 24 percent from Thursday’s closing price, reflecting moderate optimism on future performance.
Tata Motors Ltd. has been removed from brokerage firm CLSA’s high conviction outperform list on Friday, April 4. The removal from the high conviction outperform list comes in just under two months of the stock being included in the list.
Additionally, CLSA expects a 14 percent YoY decline in JLR volumes in FY26 due to 25 percent US import tariffs and Jaguar model discontinuation. As a result, Tata Motors’ EBIT margins may fall to 7 percent in FY26- 27 from 9 percent this year. JLR’s FY26 EBITDA estimate is cut but remains cash flow positive.
Also read: US Tariffs Spark Concerns: Which Indian Sectors and Stocks Are Most at Risk?
US Tariff
The 25 percent tariff on non-U.S.-made cars, announced by former President Donald Trump, takes effect today, impacting global automakers exporting to the U.S. This development raises costs and reduces competitiveness, contributing to negative market sentiment around Tata Motors and pressuring its stock performance.
Additionally, the US remains a crucial market for Jaguar Land Rover, contributing 22 percent of its total sales in FY24. Nearly one-third of JLR’s 2024 sales came from North America, with the US being the primary driver. The company’s annual report highlights the region’s significant role in its overall performance.
Segment Performance
Tata Motors’ CV segment saw an 8.4 percent YoY revenue decline to Rs 18,400 crore, but margins improved with cost-saving and PLI benefits. Trucks and buses gained market share, while PV sales hit record highs, boosting EV penetration to 24 percent. Strong SUV demand and festive sales drove growth.
New development
Tata Motors launched the all-new Sierra and Harrier EV at the Auto Expo, along with new BEVs and hydrogen ICE trucks. Its Fleet Edge platform now has 760,000+ active vehicles, while E-Dukaan and Fleet Verse grow rapidly. Sustainability efforts include Zero Waste certification and decarbonization initiatives.
Management comments
Management remains optimistic about a gradual rise in domestic demand, driven by infrastructure spending and new product launches. Meanwhile, JLR expects improved wholesales in Q4, dependent on retail growth, reflecting positive market trends and potential recovery in the automotive sector.
Company Profile
Tata Motors Group is a top worldwide automaker. As part of the legendary multinational corporation, the Tata Group, provides the globe with a diversified portfolio of automobiles, sports utility vehicles, trucks, buses, and defense vehicles.
Written by Abhishek Singh
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