UBS Projects 20% Downside for Tata Motors Amid Jaguar Land Rover Warnings

Shares of Tata Motors, the largest car manufacturer in India by revenue, experienced a significant decline of 5.6% during intraday trading on Wednesday. This drop marks the steepest decline in a series of nine consecutive days of losses for the company.

In total, the stock has seen a reduction of 12.8% over this nine-day period, making it the largest laggard on both the Nifty 50 and Nifty Auto indices. The decline follows a warning from UBS, which indicated that increasing discounts could adversely affect the financial performance of Jaguar Land Rover (JLR), a key division that contributes to two-thirds of Tata Motors’ revenue.

UBS expressed concerns regarding moderating demand and rising discounts, along with the lack of new internal combustion engine and hybrid launches that might lead to significantly weaker financial results for JLR by the fiscal year 2026. The brokerage anticipates that key JLR models such as the Range Rover, Range Rover Sport, and Defender will face heightened discounting, with the order backlog for JLR now falling below pre-pandemic levels.

In the first quarter, JLR’s wholesale volume grew by only 5%, representing the slowest growth rate in two years, primarily due to weakened demand in the vital European market. This slowdown has contributed to the decline in Tata Motors’ stock, with analysts noting an 8.1% year-on-year decrease in sales for August.