Rs 2 lakh crore vanished! Tata Motors becomes Nifty's worst nightmare
Tata Motors has emerged as the worst-performing Nifty 50 stock, with its shares plummeting 44% from their peak of Rs 1,179 in July 2024 to Rs 661.75 currently, erasing Rs 1.9 lakh crore in market capitalization. The sharp decline stems from weak demand for Jaguar Land Rover (JLR) in key markets like China and the UK, coupled with concerns over potential US import tariffs on European-made cars.
Domestically, softening sales in the medium & heavy commercial vehicle (M&HCV) segment and intensifying competition in passenger and electric vehicles (EVs) have further dented investor sentiment. As the stock struggles to find a bottom, the key question remains: Is the worst over, or is there more downside ahead?
What Led to the Massive Correction?
A combination of global and domestic headwinds has rattled investor confidence in Tata Motors. The company’s UK-based subsidiary, Jaguar Land Rover (JLR), has struggled with weak demand in key markets such as China, the UK, and the EU. Additionally, the looming risk of U.S. import tariffs on European automobiles—of which JLR is a significant player—has further clouded the outlook.
According to CLSA, JLR is currently trading at 1.2x FY27 estimated EV/EBITDA, significantly below its historical valuation multiple of 2.5x. This suggests that the market has already priced in a 10% volume decline in FY26 and an EBIT margin drop to sub-8% levels. CLSA believes that these adversities are overdone and sees the current correction as a potential entry point for long-term investors.
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