Tata Motors Shares Jump 2% on US Tariff Delay, JLR Outlook in Focus; Analysts Maintain Caution

Tata Motors Shares jumped more than 2% in early trade on Monday, May 26, after the news that US President Donald Trump has postponed the imposition of a steep 50% tariff on European Union imports until July 9.

Tata Motors Shares Today

Tata Motors Shares On Monday Morning opened in green at Rs. 722, slightly higher than the previous close of Rs. 718.25. And quickly surged about 2.61% to an intraday high of Rs 737. Tata Auto stock has surged almost 10% this month.

JLR Back in Focus as US Tariff Worries Ease

Jaguar Land Rover (JLR), owned by Tata Motors, is back in the spotlight as concerns over US tariffs begin to ease. In April, former US President Donald Trump announced a 25% tax on car imports, which led JLR to pause sending cars to the US. Later, the US government introduced some relief offering tax breaks of up to 15% for cars made in the US, which helped soften the impact.
Reports suggest that JLR has restarted its exports to the US, showing a sign of cautious optimism. The US is an important market for JLR; it buys nearly 20% of all cars made in the UK, second only to the European Union. Because of this, any changes in US trade

policy directly affect both JLR and Tata Motors.

Tata Motors Q4 FY25 Performance

Tata Motors announced its earnings for the January-March 2024 quarter (Q4 FY24) on May 13. The company reported a net profit of Rs 8,470 crore with solid gains during the period. Total revenue stood at Rs 1.19 lakh crore with higher sales and operations.
The company's operating profit, or EBITDA, stood at Rs 16,992 crore, which is similar to what it made in the same quarter last year. The EBITDA margin was 14.2%, also unchanged from last year.

One of the biggest positives came from its UK-based luxury car brand Jaguar Land Rover (JLR). JLR ended the financial year with more cash than debt, and it achieved its profitability goal of an 8.5% operating margin.

"JLR is currently facing significant uncertainty due to the tariffs levied by the US globally on automobiles. While the US-UK FTA has been a welcome agreement and helps to lower tariffs, the tariff on JLR-made vehicles exported to the US is expected to still rise to 10% from the current 2.5%." as per the Motilal Oswal Research Report.

Tata Motors Share Price Target

After the announcement of Tata Motors' Q4 FY24 results, several broking firms have updated their stock ratings and price targets.
Motilal Oswal has maintained a 'Neutral' rating on the stock, with a target price (TP) of Rs 690, implying a downside of 3%.

Meanwhile, HSIE Institutional Equities remains cautious, citing multiple headwinds. In its note, the firm stated: "We remain cautious in the near term due to the tariff overhang, subdued global macroeconomic environment, an ageing passenger vehicle (PV) portfolio, slowing EV growth amid rising competition, and moderate growth prospects for the commercial vehicle (CV) segment."

HSIE values Tata Motors using a Sum-of-the-Parts (SOTP) method and has assigned a target price of Rs. 729, maintaining a 'REDUCE' rating on the stock.

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