Tata Motors shares rise over 2% after reporting Q1 results

Tata Motors shares jumped 2.44% to an intraday high of Rs 650.75 on the BSE on Monday after reporting its Q1FY26 results, even s the auto major reported a steep 63% year-on-year (YoY) decline in consolidated net profit for the June quarter (Q1FY26). Following this, domestic brokerage firm Motilal Oswal also reduced its target price for the stock to Rs 631 from Rs 668, while retaining a ‘Neutral’ stance.

For the quarter ended June 2025, Tata Motors’ consolidated net profit fell to Rs 3,924 crore from Rs 10,514 crore in the same period last year.

Despite the significant drop, the figure surpassed Street expectations of Rs 3,408 crore. The company’s total revenue from operations stood at Rs 1.04 lakh crore, marginally down 0.3% from Rs 1.07 lakh crore recorded in the corresponding quarter of the previous financial year.

On a sequential basis, the performance also saw notable declines. Profit after tax (PAT) dropped 54% from Rs 8,470 crore reported in the March 2025 quarter (Q4FY25). Revenue, meanwhile, fell 13% compared to Rs 1.19 lakh crore in the January-March period.

The company attributed the moderation in performance to a challenging demand environment and stated it will focus on strengthening its business fundamentals. Measures outlined include mitigating tariff impacts through brand leverage, improving product mix, and implementing targeted actions to enhance contribution margins.

Commenting on the performance, Motilal Oswal highlighted that Tata Motors’ India commercial vehicle business delivered a strong performance, but both Jaguar Land Rover (JLR) and the India passenger vehicle segments continued to face considerable headwinds.

The brokerage pointed to a weak demand outlook across business segments. It said JLR’s performance was particularly affected by tariff uncertainty for US exports, muted demand in Europe and China, and rising costs related to variable marketing expenses, warranties, and emissions compliance.

Motilal further cautioned that margin pressures for JLR are likely to persist over the medium term. It has factored in a 150 basis points decline in margins for the segment over FY25–27.

While acknowledging the challenges, the brokerage’s revised target price of Rs 631 reflects its updated view on the company’s earnings prospects amid these headwinds.

On Friday, Tata Motors shares closed 2.2% lower at Rs 633.30 on BSE.

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