Tata Motors Shares Dip Over 5% as JLR Warns of Weak FY26 Cash Flow and Rising Global Risks

Tata Motors shares dropped over 5% to ₹673 on Monday, June 16, after its luxury vehicle arm Jaguar Land Rover (JLR) flagged serious concerns about future cash flow and global market challenges. Since the start of 2025, Tata Motors’ stock has already declined by 8%.

Why Did the Stock Fall?

JLR’s latest investor update revealed that it expects “close to zero” free cash flow in FY26. While the company is continuing with its planned investments and targeting EBIT margins between 5–7%, this weak cash flow outlook has spooked investors.

The company also outlined several macro and operational risks, including:

• Ongoing semiconductor shortages

• Flooding of aluminium suppliers

• Rising vehicle thefts in the UK

• US tariffs (currently 27.5% on cars from the UK and Slovakia)

• Challenges in shifting to battery electric vehicles (BEVs)

• Tightening global regulations and changing consumer preferences

China and US Markets Pose Challenges

JLR, despite doing better than the broader auto market in China, expects a 15% shrinkage in the premium car market. Key issues include:

• Fewer credit options for buyers

• Economic slowdowns

• Mass closure of dealerships

Meanwhile, to deal with the high US tariffs, JLR has paused shipments to the US (since April) and is now redirecting inventory to other markets while tweaking pricing strategies.

Tata Motors' Financial Results Add to Worries

Adding to investor concerns, Tata Motors recently reported a 51% drop in consolidated net profit, down to ₹8,470 crore in Q4 FY25, compared to ₹17,407 crore a year ago. Although revenue slightly increased by 0.4% to ₹1,19,503 crore, it fell short of market expectations.

What’s Next for Investors?

With a combination of slowing profits, rising costs, global risks, and JLR’s muted cash flow guidance, the stock market reacted swiftly. As of 10 a.m. today, Tata Motors shares were trading at ₹677 on the NSE.

Investors are now watching closely to see how Tata Motors and JLR respond to these challenges—especially with global shifts toward electric vehicles, tariffs, and regional demand issues.

Reference from:-https://www.news18.com/business/markets/tata-motors-shares-fall-5-after-jlr-sees-lower-margins-for-fy26-key-points-9387387.html