Thu Sep 12 10:49:37 UTC 2024: ## Tata Motors Stock Plunges on UBS Warning of JLR Woes

Shares of Tata Motors, India’s largest carmaker by revenue, tumbled by 5.6% on Wednesday, marking their steepest decline in a nine-session losing streak. This slump, which has seen the stock shed 12.8% in this period, was triggered by a warning from UBS about potential financial weakness at Jaguar Land Rover (JLR), the British luxury car division that accounts for two-thirds of Tata Motors’ revenue.

UBS, which holds a “sell” rating on Tata Motors stock, highlighted several concerns that could significantly impact JLR’s performance by fiscal 2026. These include rising discounts, moderating growth, and the absence of any new internal combustion engine or hybrid launches.

The brokerage also noted that JLR’s key models, like the Range Rover, Range Rover Sport, and Defender, are expected to see increased discounts, with the company’s order backlog now below pre-pandemic levels. JLR’s wholesales volume grew just 5% in the first quarter, its slowest pace in two years, driven by weakening demand in the crucial European market.

While Tata Motors has announced discounts on its domestic vehicles to boost demand, UBS remains bearish on the stock, predicting a 20% drop in its price. This outlook contrasts with the market’s overall buy sentiment, suggesting caution for investors holding or considering the stock.

While the broader market remains optimistic about Tata Motors, the growing challenges at JLR and the slowdown in the domestic market highlight the need for caution in the coming months. Investors should carefully consider the risks associated with the stock, especially given UBS’s stark warning about the potential for significant downside.

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