Tata Motors’ shares dropped by nearly 5% on Monday, June 16, 2025, after its UK-based unit, Jaguar Land Rover (JLR), gave a weak financial forecast for the current year. The company’s stock was trading at ₹679.65, making it the biggest loser on the Nifty 50 index.
JLR said it expects its profit margin (EBIT) to fall to between 5% and 7% in financial year 2026. Last year, this margin was much higher at 8.5%. This shows the company is likely to make less profit on each car it sells this year.
Another major concern is JLR’s free cash flow. In the last financial year, JLR had £1.5 billion in free cash flow. But now, it expects that number to drop to almost zero. The company hopes things will improve from FY27 and FY28 and wants to raise its profit margin back to 10%, though it hasn’t given a timeline.
JLR is very important to Tata Motors. In FY25, it contributed 71% of Tata Motors’ revenue and 80% of its total profit. The average price of each vehicle stayed above £70,000, with no change from last year.
On the global front, JLR continues to talk with the US government about trade tariffs. The UK-US deal could reduce tariffs from 27.5%, but tariffs from Slovakia remain unchanged.
Even though the luxury car market had difficulties last year, JLR still performed better than others and kept its No. 1 spot in May.
To grow in China, JLR plans to bring back the Freelander brand through its joint venture. The first car is expected in the second half of this financial year.
Investors reacted to the weak outlook by selling Tata Motors shares, leading to the steep fall.
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