Autobayng News Team
Those companies have bigger domestic footprints and are better positioned to ride the consumption uptick spurred by the tax cuts, which has led to sharp stock price gains.“>
Ever since GST2.0 was announced on August 15, Tata Motors’ stock has largely remained flat, rising a marginal 0.2 per cent even as peers focused on India’s domestic passenger vehicle segment have soared nearly 30 per cent. But why? The muted performance in Tata Motors shares is closely tied to its unique business mix and limited exposure to the GST-driven domestic growth story.While the Indian government’s recent GST cuts across sectors, including automobiles, aimed to boost consumer demand by lowering costs, Tata Motors’ domestic passenger vehicles (PVs) contribute only about 10-13 per cent to its consolidated revenue. The lion’s share — around 70 per cent — comes from Jaguar Land Rover (JLR), a luxury brand with most sales outside India that can’t reap the benefits of GST changes.This revenue mix means Tata Motors is down the pecking order on direct benefits of cheaper GST rates seen by pure domestic players like Maruti Suzuki, Hyundai Motor India, and Mahindra & Mahindra. Those companies have bigger domestic footprints and are better positioned to ride the consumption uptick spurred by the tax cuts, which has led to sharp stock price gains. To put things in perspective, M&M derives over 70 per cent of its sales from domestic passenger vehicles, while Maruti Suzuki generates roughly 80 per cent of its revenue from PV sales in India.Experts told ETMarkets that while the relief will aid volumes and pricing in India, the percentage revenue lift at the consolidated level will be limited for Tata Motors compared to peers, given the larger contribution of the JLR segment compared to the domestic PV and CV businesses.Moreover, Tata Motors faces additional headwinds. JLR is currently grappling with production shutdowns due to a cyberattack. This could weigh on both revenue and profitability, experts say. Earlier today, the company issued an update regarding the same. It added “As part of the controlled, phased restart of our operations, today we have informed colleagues, suppliers and retail partners that sections of our digital estate are now up and running. The foundational work of our recovery programme is firmly underway”. While this is a positive, Master Capital Services suggests that the ‘incident could spoil the quarterly performance and weigh down investor sentiment’.Echoing the same view, Santosh Meena of Swastika Investment said, “This could translate to a 1-2 per cent drag on Tata Motors’ FY26 EBITDA, potentially worsening if the disruptions continue. The attack also threatens to delay JLR’s ‘Reimagine’ turnaround strategy and new EV launches, adding a layer of complexity to Tata Motors’ overall challenges.”
Complicating the situation further are reports suggesting that Jaguar Land Rover may be staring at a £2 billion (around Rs 21,000 crore) financial blow due to the ongoing cyberattack — an amount that could exceed its entire profit after tax for the last financial year. A report in the Financial Times stated that JLR was not insured against such an event, which has significantly added to the financial strain.Trump tariffs make matters worse for the country’s largest EV player. JLR, deeply entrenched in the American market, sold over 4,00,000 units globally in FY24, with about 23 per cent coming from the US. “We are building in a moderate 5 per cent revenue CAGR over FY25–28E owing to muted volume growth at JLR (1 per cent CAGR) and in India CV (1 per cent CAGR). In JLR, discontinuance of ‘Jaguar’ models, loss of market share in the China region, and imposition of tariffs in the US region shall lead to volume contraction ahead,” Nuvama Institutional Equities said.
All these factors — from a limited domestic revenue base and GST insulation to cyberattack-related disruptions and geopolitical headwinds — have held back Tata Motors’ stock. While its peers race ahead on the back of a tax-driven demand boost, Tata Motors’ fortunes hinge more on how quickly JLR navigates its operational setbacks and whether its global strategy can offset the domestic growth it’s currently missing out on.
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