Tata Motors: Trump tariffs knock 5% off Tata Motors shares

The parent of British luxury carmaker Jaguar Land Rover slumped as much as 6.7% during the day, closing 5.5% lower at ₹669.5 apiece.

The Nifty Auto declined 1.04% dragged by Tata Motors’ weak show, while the benchmark Nifty rose 0.45%.

Analysts said the stock is expected to remain under pressure in the near term, as the US is a major market for Jaguar Land Rover.

“Tata Motors has already underperformed and had fallen to around ₹600 levels, ahead of the 25% tariff announcement, and it is expected to go back to these levels since the Jaguar Land Rover impact is large,” said Ambareesh Baliga, an independent analyst. He said, however, that the stock is not “expected to see a major crack from current levels.”

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He said the impact on auto ancillaries is tough to gauge at the moment but the negative sentiment has dragged other stocks lower too.Trump had pledged to levy reciprocal tariffs on all countries, including India, from April 2. However, there were expectations of some respite or waiver.Out of the 15 stocks in the Nifty Auto index, 11 declined and four advanced on Thursday. Ashok Leyland, Samvardhana Motherson International and Bharat Forge fell over 2% each while Eicher Motors and Balkrishna Industries shed around 1%.

“Around 70% of Tata Motors’ revenue is driven by the JLR business, which is why it is expected to be impacted the most due to the tariffs,” said Vinit Bolinjkar, head of research, Ventura Securities.

“The US auto industry is expected to contract by around 10% which implies a 3-5% impact on Tata Motors volumes due to its exposure through the JLR segment,” he said. “If the impact on the US auto industry is severe, then there can be a deeper impact on Tata Motors.”

So far this year, Tata Motors lost 9.54% while the Nifty moved 0.25% lower in the same period.

Baliga said the stock is expected to remain under pressure in the short term, but it can bounce back if there are a few favourable tweaks in the tariffs on April 2.

“If there is no relief or waiver however, Tata Motors could continue to underperform for a couple of weeks,” he said. “The company is likely to cut back on margins to get out inventory prior to reworking the pricing,” according to Bolinjkar.

“While no immediate drop is expected after today’s decline, the weak sentiment can drag the stock lower as Tata Motors is a high beta stock.” Bolinjkar believes that Tata Motors will present a buying opportunity from a medium to long term perspective if the stock falls to around Rs 600 levels.