Thu Jan 30 13:02:02 IST 2025: ## Tata Motors Shares Plunge 8% After Disappointing Q3 Earnings

**Mumbai, India** – Tata Motors shares experienced a significant 8% drop in morning trade Thursday following the release of its disappointing third-quarter (Q3) financial results for fiscal year 2024-25. The automaker reported a 22.5% year-on-year decline in net profit, falling to ₹5,578 crore compared to ₹7,415 crore in the same period last year. While the Jaguar Land Rover (JLR) segment performed well, overall profitability was hampered by reduced margins.

Despite a 62% sequential improvement from the previous quarter, analysts reacted negatively. Jefferies India downgraded Tata Motors to “Underperform” from a 3.5-year “Buy” rating, citing weaker-than-expected Q3 earnings before interest, tax, depreciation, and amortization (EBITDA), which fell 16% year-on-year. The brokerage firm highlighted weak demand in China and Europe for JLR, rising acquisition costs, and increased warranty expenses as key concerns. They also noted slowing demand in India’s commercial and passenger vehicle markets and increased competition in the electric vehicle (EV) sector. Jefferies lowered its price target to ₹660 and prefers Mahindra & Mahindra, Eicher Motors, and TVS Motor Company in the auto sector.

Motilal Oswal Financial Services, while acknowledging JLR’s maintained FY25 guidance, expressed doubt about achieving the projected EBIT margin, citing persistent margin pressure due to weak demand, rising costs, and margin dilution from EV expansion. They lowered their EBITDA estimates and maintained a “Neutral” rating with a target price of ₹755.

Although JLR’s supply chain issues are resolving, and the company anticipates a strong Q4, concerns remain about overall demand trends, particularly in China. Despite the negative outlook, one brokerage upgraded Tata Motors to “Add” from “Sell,” citing expectations of margin improvement in the coming years and new product launches. However, they lowered their target price to ₹831.

The discrepancies in analyst opinions highlight the uncertainty surrounding Tata Motors’ future performance. Investors are advised to consult with financial advisors before making any investment decisions.

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