Tata Motors Shares Dip Amid Market Pressure: What’s Driving the Decline?

June 16, 2025
|In Business
|By Mridul Upadhyay

Tata Motors, one of India’s leading automobile manufacturers, has been a dominant player in both the domestic and international automotive markets. However, its share price has recently seen a notable decline, raising concerns among investors and market watchers. Despite its strong fundamentals and product portfolio, the stock is facing a temporary setback. This article delves into the latest developments surrounding Tata Motors, reasons behind the recent fall in its share price, and what the future may hold.

Tata Motors at a Glance

Tata Motors Limited is a part of the Tata Group, a respected Indian multinational conglomerate. With a wide product range including passenger cars, commercial vehicles, and electric vehicles (EVs), the company has carved a solid position in the Indian automotive space and abroad through subsidiaries like Jaguar Land Rover (JLR).

As of early June 2025, Tata Motors shares have shown increased volatility. After delivering robust performance in previous quarters, the stock is now under pressure due to a combination of domestic and global factors.

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Recent Share Price Performance

Over the last few weeks, Tata Motors’ share price has seen a decline of nearly 10% from its recent highs. On the NSE, the share was trading close to ₹970 in May 2025, but has now dropped to around ₹870–₹890 levels as of mid-June.

This pullback has caught investor attention, especially given the company’s previously strong uptrend, powered by record sales in electric vehicles and JLR’s turnaround performance.

Why Tata Motors Share is Falling: Key Reasons

1. Profit Booking by Investors

After a long bull run, Tata Motors shares became a target for profit booking. Investors who entered at lower levels are cashing in their gains, leading to a natural correction in the stock.

2. Weak JLR Outlook in Key Markets

Jaguar Land Rover, the UK-based luxury brand owned by Tata Motors, has reported softening demand in key markets like China and Europe. The company also flagged potential headwinds from EV transition costs and regulatory pressures.

3. Raw Material Cost Pressures

Rising input costs, especially for EV batteries and semiconductors, are eroding margins. While Tata Motors has managed this well so far, sustained inflation in materials can impact profitability going forward.

4. Slowdown in EV Subsidies

Both in India and globally, there is a gradual reduction in EV subsidies. For Tata Motors, which is betting big on EV growth, this policy shift might slow adoption in the short term, especially in price-sensitive markets.

5. Broader Market Correction

The Indian equity markets have recently entered a phase of consolidation. The Sensex and Nifty have witnessed profit booking due to global uncertainty, rate hike fears in the US, and weakening FIIs sentiment. Tata Motors, being a part of major indices, is also impacted.

Recent Company News & Announcements

JLR Investment Plans

Tata Motors has committed to investing significantly in Jaguar Land Rover to boost its EV capabilities. The company recently announced fresh investment to accelerate JLR’s Reimagine strategy, which focuses on turning it into an all-electric luxury brand by 2030.

Tata.ev Strategy Update

The domestic EV arm, Tata Passenger Electric Mobility (TPEM), has outlined an aggressive expansion plan with multiple upcoming EV launches. Models like the Punch EV and Curvv EV are set to bolster Tata’s EV market share, which already stands at over 70% in India.

June Production & Delivery Numbers

Preliminary data for June 2025 suggests a slight decline in domestic commercial vehicle sales, although passenger vehicles and EV numbers remain resilient. However, slower growth in CVs is a concern for the broader revenue mix.

Analyst Views on Tata Motors

Market analysts remain divided. While many see this correction as a healthy pullback and a buying opportunity, others caution about global risks.

Positive Outlook:

  • Strong EV leadership in India.

  • JLR’s long-term transformation story.

  • Domestic auto industry recovery.

Concerns:

  • High exposure to cyclical sectors like CVs.

  • External macroeconomic challenges.

  • Execution risk in JLR’s EV transition.

What Should Investors Do Now?

The recent fall has made Tata Motors stock more attractive on a valuation basis. For long-term investors with a 2–3 year horizon, the stock offers a solid growth story backed by EV innovation and a global luxury brand turnaround. However, short-term traders may want to wait for signs of stability or a reversal before making fresh entries.

Technical View of Tata Motors Stock

On the technical charts, Tata Motors stock has breached its 50-day moving average, indicating short-term weakness. Key support lies near ₹850, and resistance is seen around ₹900–₹920.

If the stock holds above ₹850, a rebound could be expected. A breakdown below this level might trigger further selling pressure.

Key Financial Highlights (FY2024-25)

  • Revenue: ₹4.2 lakh crore (approx.)

  • Net Profit: ₹28,900 crore

  • JLR Contribution: 65% of total revenue

  • EV Sales YoY Growth: 40%

  • Net Debt Reduction: Significant improvement due to better cash flows

Tata Motors vs Peers

Compared to peers like Mahindra & Mahindra, Maruti Suzuki, and Hyundai (India operations), Tata Motors stands out in the EV segment. However, global exposure through JLR also brings in more volatility versus peers focused solely on the Indian market.

Long-Term Outlook Remains Positive

Despite the short-term dip, Tata Motors continues to build a strong foundation for the future:

  • Leading player in India’s fast-growing EV market.

  • JLR brand revival gaining traction in premium markets.

  • Improving balance sheet and reducing debt.

These factors support the long-term bullish narrative.

Conclusion

Tata Motors is experiencing a natural correction after a strong rally, influenced by macroeconomic pressures, global market softness, and investor profit booking. However, the company’s underlying fundamentals remain strong, and its strategic moves in EVs and luxury mobility position it well for future growth.

For long-term investors, this phase may present a good opportunity to accumulate quality shares of a company that’s not only steering India’s automotive future but also making waves on the global stage.