Tata Motors share price cracks 5%. What's behind the fall? Explained

Tata Motor share price: Shares of India's top auto company Tata Motors declined over 5% in early trade on Monday as it expects the FY26 earnings before interest and taxes (EBIT) margins of 5% to 7% for its British luxury carmaker Jaguar Land Rover (JLR), lower than an initially targeted 10%, amid US-imposed tariffs.

As the global auto industry gauges the impact of looming US tariffs, Tata Motors remains one of the most exposed Indian automakers to Donald Trump's tariffs on vehicle imports, given its ownership of Jaguar Land Rover.

The EBIT margin outlook for the current fiscal year remains below the reported margin of 8.5% for FY25.

Furthermore, after reporting free cash flows of £1.5 billion for the full fiscal year 2024-25, JLR expects the figure to decline to close to zero in FY26. However, management remains optimistic going forward, stating that they expect to improve year-over-year for FY27 and FY28.

Amid US tariff woes, JLR had temporarily paused shipments to the country after Trump slapped a 25% duty on all foreign-made vehicles sold in the world's second-largest car market.

Jaguar Land Rover contributes significantly to Tata Motors, accounting for approximately two-thirds of its consolidated revenue. In FY25, JLR contributed about 71% of Tata Motors' total revenue and 80% of its profitability.

Tata Motors share price trend

Against this backdrop, Tata Motors share price declined as much as 5.5% to the day's low of ₹672.75 on the BSE. From its 52-week high of 1,179.05, the Tata Motors stock has tumbled 43%, resulting in a significant investor wealth erosion.

Meanwhile, over the last year, Tata Motors has seen a 31.40% decline in its stock prices, and for the year-to-date (YTD), it is down 9%.

As of 10.27 am, Tata Motors stock was down 4.3% at ₹681.90 apiece.

Tata Motors stock: Buy or sell?

Jigar S Patel, Senior Manager - Technical Research, Anand Rathi Shares and Stock Brokers, said Tata Motors recently encountered resistance near the neckline of its inverse head and shoulders pattern, failing to sustain above the key 750 level. 

“Currently, the stock is resting on the S3 Camarilla monthly pivot, indicating a crucial support zone. With this structure, immediate support is seen near 665, while resistance lies around 715. A decisive daily close above 715 would confirm bullish momentum and open the door for further upside. Until then, it’s prudent to wait for confirmation before initiating fresh long positions,” Patel opined.

(With inputs from agencies)

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