Shares of Tata Motors Ltd cracked 7 percent to Rs 661 in morning trade on March 27 as investors assessed the impact of Donald Trump’s proposed 25 percent tariff on imported cars. Announced as part of his broader trade policy, the tariffs are set to take effect on April 2. It remains unclear whether the duties will apply to specific countries or all non-US carmakers.
By day's close, the stock clawed back some of its losses to trade 5.5 percent lower at Rs 669.5.
For Jaguar Land Rover (JLR), Tata Motors’ luxury car subsidiary, the US is a key market. North America accounted for nearly one-third of JLR’s global sales in 2024, with the US alone contributing 22 percent, according to its annual report. Higher tariffs could make JLR vehicles more expensive for American buyers, potentially affecting demand.
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JLR cars sold in the US are primarily manufactured in the UK and other international locations—all of which will now be subject to the 25 percent tariff.
On March 12, several brokerages weighed in on the company and the potential tariff impact. The consensus among analysts was that JLR remains on track to meet its FY25 targets, with expectations of volume growth in the coming quarters. While concerns about US auto tariffs persist, brokerages believe JLR can offset the impact through price hikes and cost efficiencies, sustaining its growth trajectory.
Nomura reaffirmed its bullish stance on Tata Motors, maintaining a ‘Buy’ rating with a target price of Rs 861, citing management’s confidence in JLR’s luxury expansion strategy and EBIT margin targets for FY25.
Macquarie echoed this view with an ‘Outperform’ call, noting JLR’s progress toward a net cash balance sheet by FY25 and the improving margins in Tata Motors’ domestic commercial vehicle (CV) business.
CLSA issued one of the most bullish calls, terming the stock a ‘High Conviction Outperform’ with a target of Rs 930, expressing strong confidence in JLR’s ability to meet financial commitments.
Goldman Sachs expects JLR’s volume growth to accelerate, particularly as Jaguar phases out internal combustion engine (ICE) models, potentially boosting demand for newer offerings.
However, not all brokerages are optimistic. Nuvama issued a ‘Reduce’ call with a target of Rs 720, citing tariff risks and broader macroeconomic uncertainties. While it acknowledged that JLR could mitigate the impact through price increases, it remains cautious about potential headwinds.
Tata Motors shares closed at Rs 666 on the NSE, down 6 percent from the previous close. India’s largest four-wheeler EV player has gained over 9 percent in the past month amid a broader market rally.
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