Shares of Tata Motors ended over 2 percent to close at Rs 655 apiece on March 13, weighed down by muted overall February car sales growth as reported by SIAM, and a report that said Jaguar Land Rover has rolled back its plans to build electric vehicles in India.
The overall auto sector as February sales data released by the Society of Indian Automobile Manufacturers (SIAM) failed to impress investors, with cars and three-wheeler sales rising by 1.9% and 4.7% respectively, and total two-wheeler sales falling by 9% on year.
Separately, news agency Reuters reported citing sources that Jaguar Land Rover has shelved its plans to build electric vehicles at its parent company Tata Motors' upcoming $1 billion factory in India.
People familiar with the matter told Reuters that the luxury car-maker was unable to find the right price-quality balance for EV parts which are locally sourced. This may also reflect the slowing demand for electric cars in India, the report added. All the work for JLR's electric cars in India has been suspended since nearly two months, a supplier told Reuters condition of anonymity.
JLR's decision is also expected to delay plans for Tata Passenger Electric Mobility, Tata's local electric car unit, to launch the first of its premium Avinya models, the report added.
Tata began building its new factory in Tamil Nadu in September last year. It is slated to make over 2.5 lakh cars every year once it reaches full capacity is nearly 5 to 7 years.
Notably, SIAM released its data for the monthly performance of the auto sector on March 13. The total domestic sales of passenger vehicles stood at 3.78 lakh in February. While this marks a rise from February last year, it also marks a fall of over 5 percent from January this year.
"Passenger Vehicles segment remained resilient and posted its highest ever sales of February in 2025 of 3.78 Lakh units, with a growth of 1.9% as compared to February 2024…Upcoming festivities of Holi and Ugadi in March is likely to continue to drive demand, thereby closing FY 2024-25 on a reasonably positive note," said Rajesh Menon, Director General, SIAM.
Tata Motors shares have made some recovery in the past one week, after hitting a 52-week low of Rs 606 apiece on March 3. The stock however is significantly down from its 52-week high of Rs 1,179 per share.
Nomura has recommended a 'Buy' rating on Tata Motors with a target price of Rs 861 per share, while Macquarie has given an 'Outperform' call with a target of Rs 826 per share.
The stock of Tata Motors is a 'High Conviction Outperform' for CLSA, which expressed confidence that JLR will be achieving FY25 targets, assigning the stock a price target of Rs 930 per share. Nuvama issued a 'Reduce' call on Tata Motors with a target price of Rs 720 per share, adding that tariff imposition on JLR can be offset by price hikes.
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