Tata Motors PV shares fall after profit plunges, warns on margins

Shares of India’s Tata Motors Passenger Vehicles fell as much as 6% on Friday after the automaker posted an 80% plunge in quarterly profit and warned that margin pressures would persist into the second quarter.

The stock was down 4.8% at 332.85 rupees as of 1:37 PM IST, its biggest one-day percentage decline since June 17. It was the top loser on the auto and Nifty 50 indexes.

During a post-earnings call on Thursday, Tata Motors PV said commodity-related cost pressures were expected to persist into the July-September quarter.

“The second quarter is going to hit us badly. Not just us, but the whole industry will get hit,” CEO Shailesh Chandra said.

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First-quarter margins at luxury unit Jaguar Land Rover (JLR), which makes up about 80% of Tata Motors PV’s revenue, and at its domestic passenger vehicle business both came in below analysts’ expectations.

Tata Motors PV is facing multiple headwinds at JLR, including increased competition, heavy discounts and high warranty costs, Jefferies said in a note. The brokerage lowered its FY27 earnings per share estimate by 10% and cut its target price on the stock while maintaining its “underperform” rating.

Margin pressure at JLR and in the domestic passenger vehicle business could weigh on the company’s cash generation in the near-term, Nomura said in a note, while maintaining its “neutral” rating.

Tata Motors PV on Thursday reported a quarterly consolidated net profit of 7.75 billion rupees in the April-June quarter compared to 39.24 billion rupees in the year-ago period.