Tata Motors Shares Rise as Trump Delays EU Auto Tariffs; JLR Resumes U.S. Exports

Tata Motors shares edged higher on Monday, gaining over 1% to ₹727, after the White House postponed a proposed 50% tariff on automobile imports from the European Union to July 9, easing investor concerns for its UK-based subsidiary, Jaguar Land Rover (JLR). As of 12.33 PM, the shares of Tata Motors were trading almost 2% in the green. 

The reprieve follows a turbulent April when the U.S. President Donald Trump had announced a 25% tariff on auto imports, prompting JLR to temporarily suspend vehicle shipments to the U.S., its second-largest market after the EU. The company has since resumed exports, aided by a subsequent executive order that offered partial relief via tax credits and waivers on vehicles assembled domestically.

The development comes as a welcome breather for Tata Motors and its investors. The U.S. remains a key export destination, accounting for nearly 20% of UK car exports. Analysts believe that while the delay in tariffs offers short-term relief, trade policy uncertainty could return in July, making JLR’s upcoming investor day on June 16 a critical event for forward guidance.

Strong Financial Performance

JLR continues to deliver robust operational performance, clocking ₹7.7 billion in revenue and an EBITDA margin of 15.3% in Q4FY25  -  marking its 10th consecutive profitable quarter. The company also achieved its target of positive free cash flow for the full fiscal year, highlighting improved cost management and operating efficiency.

Looking ahead, JLR plans to invest ₹18 billion over the next five years, funded entirely through internal accruals. The capital will be deployed towards product innovation and electrification, aligning with the company's long-term sustainability goals.

At the group level, Tata Motors reported record-high consolidated revenue and profit before tax in FY25, driven by growth in both domestic and global markets. A major highlight was achieving net debt-free status in its automotive business, a milestone that significantly boosts investor confidence. The deleveraged balance sheet is expected to reduce interest costs and provide more financial flexibility.

Stock Outlook

While the stock is down about 4% year-to-date, it has rebounded 21% from its April lows, suggesting renewed buying interest at those levels. However, analysts caution that the gains could be short-lived if trade tensions escalate post-July.

As market participants await clearer signals from the JLR investor day, the near-term outlook hinges on geopolitical developments and further clarity around U.S. trade policy. For now, Tata Motors appears to be cruising on a more stable path  -  but the road ahead may still have a few turns.

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