Shares of Tata Motors’ Passenger Vehicles (TMPV), which also houses the Jaguar Land Rover (JLR) business, saw a sharp 10% decline in the afternoon deals on Wednesday, 17 June, as investors reacted sharply to the FY27 roadmap shared by the luxury car maker.
Tata Motors PV share price hit the day’s low of ₹355 on BSE. As of 2.50 pm, the Tata group stock was down 8.30% at ₹360.95 apiece.
JLR shared its investor day update for the ongoing fiscal year, wherein it said that it is targeting a medium-term double-digit growth with an increased focus on North America.
What JLR said in its FY27 outlook
After a tough FY26, the company expects its revenue and margins to improve while capex remains steady. It has pegged its FY27 revenue at £26 billion, expecting a 13% growth from £23 billion in FY26. Meanwhile, EBIT margins are seen rising to 4% from >0% in the last fiscal.
The company also outlined cost-saving plans with an aim to drive £1.7 billion of savings and return breakeven volumes towards 3 lakh vehicles in the next two years. Operating cash flows are also expected to breakeven as remaining negative £2.3 billion last fiscal.
JLR said that it is targeting medium-term double-digit revenue growth by leveraging its House of Brands strategy to cater to different customer segments and diversify its sources of growth, the company said in a statement.
After facing a semiconductor shortage in FY22 and FY23, the company rebounded in the subsequent fiscal years only to be battered in FY26 by a cyber attack that significantly impacted production volumes.
Why are Tata Motors PV stock falling?
While the current estimates reinforce the company’s plans to return to profitability, the execution is key. Harshal Dasani, Business Head at INVasset PMS, said that the market is not reacting to one weak headline, but to the gap between ambition and current cash generation.
“JLR closed FY26 with £22.9 billion revenue, only 0.7% EBIT margin, and negative free cash flow of about £2.2 billion. For a premium auto business sitting at the centre of Tata Motors PV’s valuation, that combination leaves little margin for error. The pain point is not demand alone. It is that profitability and cash flow have reset while investment intensity remains high,” he said.
He said that the management is still committing £18 billion of investment and targeting meaningful cost savings over the next two years, while talking about medium-term double-digit revenue growth. That is a credible plan if execution lands, but the near-term risk-reward has tightened because tariffs, China weakness, product transition costs, and launch spending are all hitting together, according to Dasani.
Earlier in the day, BofA Securities had assigned an “underperform” rating to Tata Motors PV shares with a price target of ₹335.
Tata Motors PV’s margin recovery hinges on a self-help program, targeting lower break-even points and cost savings of close to £1.7 billion, BofA said, as per a CNBC TV-18 report. Execution on JLR’s new launches, its Electric Vehicle strategy, and cost-cut programs will be key for the company amidst tough macros, BofA said. The comments came before the investor day announcement.
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