Tata Motors Passenger Vehicles (TMPV) shares crashed 10% intraday on Wednesday to hit the day’s low of Rs 355 on the BSE as investors reacted to the financial year 2027 (FY27) roadmap shared by its British subsidiary Jaguar Land Rover (JLR).
The luxury automaker, in its investor day update, stated that it is targeting a medium-term double-digit growth with an increased focus on North America.
Amid heavy volume, the stock recovered from the day’s low and ended 8.10% lower at Rs 361.70 on the BSE. The decline came despite optimism in the broader equity market as benchmarks - BSE Sensex and NSE Nifty50 - advanced for the fourth straight session on Wednesday amid falling crude oil prices triggered by easing geopolitical tension.
The BSE Sensex closed 0.45% higher at 77,156 levels while the Nifty50 settled 0.40% higher at 24,086.
JLR has projected revenue growth of 13% to £26 billion for FY27 and guided for EBIT margins of 4%, compared with just over 0% in the previous financial year. While this is a big improvement, analysts at large were expecting margins above the 4% mark.
“JLR EBIT margin guidance of 4% in FY27E was lower than the street's expectation of 5% - 6% which led to the sharp sell-off in the stock,” said Sunny Agrawal, Head - Fundamental Research at SBI SECURITIES.
He added that profitability at JLR has been impacted due to supply chain challenges, plant shutdown due to cyber attacks as well as adverse currency movement.
“Extent of recovery will depend on the demand recovery in key markets of North America and Europe and the success of EV transition of the product portfolio,” said Agrawal.
As JLR contributes more than three-fourths of Tata Motors PV’s consolidated revenue, any change in its outlook and operations has a significant impact on investor sentiment toward the parent company.
Among major highlights, JLR expects operating cash flow to break even in the current financial year, an improvement from the negative £2.3 billion recorded last year. The carmaker also reconfirmed its existing five-year commitment to invest £18 billion by FY29.
JLR also stated that it will sharpen its focus on the Defender brand to deliver its growth aspirations in the US market. The company said its aspiration is to grow its US business to the size of its entire current JLR business.
Further, JLR said it will continue to invest and grow in future high-potential markets, including India and West Asia.
TMPV and Tata Sons chairman N Chandrasekaran recently said that FY2026 was a challenging year for JLR, shaped by a confluence of internal and external disruptions. Owing to these headwinds, JLR sales fell sharply from 400,898 units in FY25 to 307,915 units in FY26.
He added that JLR will additionally focus on reducing its breakeven levels, which have been impacted by tariffs, currency and commodities inflation, back to 300,000 units in the next 2 years whilst remaining focused on delivering exceptional launches of its New Range Rover Electric, Jaguar Type 01 and continuing to build its Modern Luxury franchise.