Tata Motors stock fell over 5% after its subsidiary Jaguar Land Rover (JLR) warned of “close to zero” free cash flow in FY26, triggering investor concerns. The Tata Motors share price dropped sharply amid rising macroeconomic risks and cautious outlook.
This Tata Motors news raised questions like why Tata Motors is falling despite strong past performance. Analysts suggest the cash flow guidance may impact future investments. Investors are closely watching Tata Motors share trends for recovery signals. Stay updated with the latest Tata Motors share news and tatamotors share price movements in the coming sessions.
Tata Motors Tumbles as JLR Projects Near-Zero FY26 Free Cash Flow
On June 16, Tata Motors’ shares dropped more than 5% to Rs 673 after its luxury division, Jaguar Land Rover (JLR), located in the UK, highlighted a number of macrorisks and poor free cash flow projections in its most recent investor presentation.
Despite its continued commitment to its investment plans and its goal of maintaining EBIT margins between 5 and 7 percent, JLR stated that it anticipates free cash flow to be “near zero” in FY26. The business emphasised that corporate transformation is still essential to its “reimagine” journey, which is anticipated to gradually generate £1.4 billion in benefits annually.
A number of current and potential hazards that might affect profitability were outlined by the British subsidiary. A lack of semiconductors, an influx of aluminum suppliers, an increase in thefts in the UK, and impending issues including US tariffs, the switch to battery electric vehicles (BEVs), stricter regulations, and changing consumer expectations are a few of these.
For FY25, JLR acknowledged growing pressure in the luxury automobile class in China, the largest auto market in the world. JLR is up against fierce competition and economic challenges even if it has outperformed the overall market. The corporation reported a steep decline in new loan issuance and a wave of dealership terminations, along with an anticipated 15% contraction in the premium market.
The business also explained how it plans to lessen the effects of US tariffs, which are presently 27.5 percent on cars coming from Slovakia and the United Kingdom. In order to maximize profit delivery, JLR temporarily halted exports to the US in April and is reevaluating pricing tactics and reallocating units to more accessible regions.
For the fourth quarter that ended in March 2025, Tata Motors recorded a 51 percent drop in consolidated net profit to Rs 8,470 crore. In the same quarter of the previous fiscal year, the firm had a consolidated net profit of Rs 17,407 crore. Its consolidated total income from operations missed projections, rising 0.4 percent to Rs 1,19,503 crore from Rs 1,19,033 crore in the same period last year.
The company’s shares were down 5% from the previous close on the NSE, trading at Rs 677 at around 10 am. Since the year started, Tata Motors’ stock has decreased by 8%.
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