Tata Motors shares hit tariff bump, slip 20% from March high; what's next?

Shares of Tata Motors have plunged 20% from their March high as US President Donald Trump unveiled tariffs on the country's trading partners. The auto sector stock hit a monthly high of Rs 723.05 on March 25, 2025. However, the upcoming announcement on April 2 took the fizz out of the stock. 

It closed at Rs 671.90 on April 2, hours ahead of the 'Liberation Day' announcement. Tata Motors' UK arm JLR has nearly 20% share in the US market, second only to the European Union, data from industry body SMMT show.

The stock has slipped another 13% since Trump announced tariffs of 26% on Indian imports on April 2. 

In fact, shares of Tata Motors fell to their 52-week low of Rs 542.55 in the previous session. As the auto stock is near 52-week low today, its looks weak trading below the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Tata Motors stock is also oversold on charts, indicates its Relative Strength Index (RSI) of 25.8. A RSI value above 70 indicates a stock is overbought and below 30 denotes that it is oversold on charts. 

The stock has seen very high volatility with its beta climbing to 1.2 in a year. 

Kotak Institutional Equities has downgraded the stock to reduce from add. It sees a fair value of Rs 600 for the large cap firm. 

The brokerage expects a 15-37% potential earnings downside for Tata Motors, depending on the tariff structure. "Given that the US car market was the fastest-growing market, JLR’s volumes and profitability may remain under pressure in the near term. Downgrade to REDUCE (from ADD)," said Kotak. 

Trump tariffs are likely to act as a significant headwind for Jaguar Land Rover, which derives 28-30% of its volumes from the US. 

"The key models (Defender, RR, RR Sport) may lose some ground to players with local manufacturing. Compounding this, the broader US luxury car market may face a potential slowdown amid macro uncertainty," added Kotak Equities. 

On China, Kotak said the outlook for the China luxury car market remains subdued amid macroeconomic headwinds, shifting consumer preferences and the rapid rise of domestic electric vehicles (EV players). 

"JLR will have to navigate the tariff situation in the US, fast shifting market in China and potential risk of global recession in the coming quarters," the brokerage said. 

Sentiment around the stock is also sombre amid reports the JLR has stopped shipments to the US post 25 per cent tariffs announced by the US on all auto and auto component imports. JLR earned 23 per cent revenue and 26 per cent of the total wholesale volume from the US in FY24.

Brokerage CLSA said in a note that it sees a 14% drop in JLR's overall volumes in the fiscal year to March 2026, led by a 26% fall in US sales on the back of tariffs. 

On the outlook of Tata Motors' business in the US market, Arun Agarwal, Vice President- Fundamental Research, Kotak Securities said, "US has imposed 25% tariff on imported vehicles and that could pose few challenges to Tata Motor’s JLR business. For JLR, the US is a key market and accounts for 28-30% of its volumes. If there is significant increase in vehicle prices on account of the tariff, that could hurt JLR’s volumes and profitability. JLR’s premium brand positioning could help cushion some impact from this though. The situation remains uncertain for now, but risk of global recession has increased earning risks for this financial year."

Ravi Singh, SVP - Retail Research, Religare Broking said, "Tata Motors continues to exhibit pronounced bearish momentum, with the stock trading firmly within a well-defined descending channel. The recent sharp decline reinforces the prevailing downtrend, underscoring heightened selling pressure. The stock is currently trading below its 200-day EMA, reaffirming the strength and persistence of the broader bearish trend. The weekly RSI is positioned below the oversold threshold, indicating significant weakness. Recently Jaguar Land Rover (JLR) a wholly owned subsidiary of Tata Motors posted flat wholesale number for just concluded fiscal year mainly due to weak performance in its core Chinese market. Overall sentiment remains negative, and any pullback towards the 630–650 zone is likely to be viewed as a selling opportunity, with potential downside targets in the range of 550–500 in the near to medium term."

AR Ramachandran, SEBI registered Independent analyst said, "Tata Motors is slightly bullish on the daily charts with strong support at Rs 535. A daily close above the resistance of Rs 650 could lead to a target of Rs 717 in the near term."