Tata Motors Falling in 2025: Shocking Reasons Behind the Crash!

May 14th, 2025

Tata Motors, without saying anything, is the most popular brand in the Indian car-making industry. The roots of love towards this brand come from strong customer satisfaction and years of trust, but has this been shaken recently? Why is Tata Motors not loved the same? Why has the brand been taking a beating in the stock market throughout 2025?

We all have these questions, and before investing in the brand, you should know all the reasons and possibilities of it improving or getting worse from here. Tata Motors has seen a share price depreciation of around 44.52% from a high cost of ₹1,179.05 to a low value of ₹565 on April 7, 2025. This incident didn't go unnoticed, and now the investors are all rattled, and the reasons are a mix of global economic turbulence, internal struggles, and shifting market moods.

This article shall explore all the reasons why Tata has been failing recently in detail.

Global Economic Struggles Hitting Tata Motors Hard

The world economy has been a little edgy and has, as a result, thrown lemons at Tata’s end. All of the luxury brands have taken the hot market more seriously than others, including Jaguar Land Rover. These brands were the main source of bringing large chunks of money as income to the brand, and without them, the share market has definitely evidenced the shift of value.

U.S. Tariffs

International taxation has broken the backs of many import businesses, including Tata. The U.S. decided to put a 25% tariff on auto imports in April 2025, and the best products of Tata that used to get about 23% of its sales from the U.S. were reluctantly forced to pause shipments there. As a result of this decision, Tata Motors’ stock came down by a margin of 10% in a single day on April 7, 2025.

Market Chaos:

As the share market got sour for Tata, the same day took another hit when the BSE Sensex crashed 2,227 points, and was dragged down by fears of a U.S. recession and a slowly cooking global trade war. Tata Motors was one of the brands that took the hardest hit, and almost dropped over 8% as investors fled risky stocks.

Oil Prices Bite:

The oil pricing was also concluded as one of those reasons, as Brent crude climbed to $67.89 per barrel in April 2025. So the manufacturing costs ultimately shot up. Higher fuel prices also scared off buyers, especially in India, where folks think twice about big purchases when filling up the tank hurts.

Financials of Tata Showing Cracks

Tata Motors’ log of recent financial reports arent in any positive light and includes a lot of risky zones. This is causing a stir among the investors as well as the shareholders.

Profits: The net profit fell 22.4% year-on-year to ₹5,451 crore in the third quarter of FY25. The revenue did reach 2.7% to ₹1,13,575 crore. Now, the analysts are expecting a 36% drop in profit after tax for a Q4 FY25.
Revenue Stalls: Q4 FY25 revenue is expected to stay around ₹1,19,503 crore, which is barely moving anywhere from last year.
Sales Slump: Domestic sales in Q4 FY25 dropped 5% to 2.46 lakh units. Passenger vehicles fell 9% to 1.47 lakh units, and commercial vehicles slid 3% to 1.05 lakh units.

Jaguar Land Rover’s Struggles

JLR is Tata Motors’ hero product, but it’s been more of a burden lately. The luxury brand’s challenges are a big reason the stock is continually depleting.

U.S. Market Sourness: Those U.S. tariffs are a nightmare for JLR. It relies on America for almost 1/4th of its sales. Analysts at CLSA predict a 14% drop in JLR’s sales volumes for FY26 because of the tariffs and some discontinued Jaguar models.
Shrinking Margins: JLR’s EBIT margin is expected to go from 9% in FY25 to 7% in FY26/27. All of this contributed to lower sales and higher costs.

Investors Losing Faith in Tata

An important part of Tata’s success has already been shaken up. The rigid and stable stock of this brand is continuously regressing, which is not promising for any investor. Even the reliable partners are taking their trust out of it recently.

Brokerage Blues: CLSA has reduced its target price for Tata Motors from ₹930 to ₹765 on April 4, 2025. They’re worried about JLR’s tariff troubles and shrinking margins.
Big Losses for Big Names: Investors like Rekha Jhunjhunwala took a ₹293 crore hit in a single day on April 7, 2025. This was the result of plummeting stock by a margin of 10%. That kind of loss makes even the boldest investors think twice.
FIIS Bailing Out: Foreign institutional investors have also cut their stake from 18.66% in December 2024 to 17.84% by March 2025. This big money’s pullback was kinda of a red flag to everyone else.

Tata Struggling in Indian Market

The global issues are also accompanied by home issues, which is quite unexpected of Tata.

Sales Stagnate: March 2025 was recorded with domestic sales at 90,500 units. Commercial vehicle sales were stuck at 12% year-on-year, while passenger vehicles only grew 6% in the same period.
Competition Heats Up: Tata Motors is stuck rehashing old models like the Nexon and Safari instead of launching bold new ones. Rivals like Mahindra are stealing the spotlight with fresher and advanced models.

Frequently Asked Questions

1. Why’s Tata Motors’ stock tanking in 2025?

U.S. tariffs are one of the biggest reasons why this is happening. The brand evidenced a 36% profit drop in Q4 FY25, and JLR’s sales worries are the big culprits.

2. How do U.S. tariffs hurt Tata Motors?

The 25% tariffs are forced on the import business, and now the JLR is forced to halt U.S. shipments. This trade initially made up to 23% of its total sales. Analysts see a 14% sales drop for JLR in FY26.

3. Is now a good time to buy Tata Motors’ stock?

The stock is oversold. Some analysts are actually eyeing a ₹1,000 target if things stabilise.

CARVERSAL