Tata Motors shares: Jhunjhunwala loses Rs 293 crore in 30 seconds; here's why

Rekha Rakesh Jhunjhunwala lost more than Rs 230 crore in Tata Motors at the opening tick on Monday as the auto major crashed as much as 10 per cent for the day. Jaguar Land Rover, an arm of Tata Motors., said it would pause shipments to the US in April in the wake of President Trump’s tariffs, which led to the sell-off in the stock.

Shares of Tata Motors tumbled nearly 10 per cent to Rs 552.50, hitting the lower circuit limit and 52-week low for the day. The total market capitalization of the company slipped to Rs 2.03 lakh crore. The stock had settled at Rs 613.85 on Friday. The stock has crashed more than 53 per cent from its 52-week high at Rs 1,179.05 on July 30, 2024.

In the wake of the steep correction, the total valuation of Jhunjhunwala's stake tumbled to Rs 2,639.30 crore on Monday, from Rs 2,932.37 crore at Friday's close. Jhunjhunwala lost Rs 293.07 crore in just a few seconds in Tata Motors stock. From its peak, she has lost nearly Rs 3,000 crore in only Tata Motors stock.

Tata Motors' UK-based arm Jaguar Land Rover has announced to stop shipments to the US, following the 25 per cent tariffs announced by the President Donald Trump on all auto and auto component imports. In FY24, JLR derived 23 per cent revenue and 26 per cent  of the total wholesale volume from the US.

Global brokerage firm Morgan Stanley has reiterated its ‘Equalweight’ rating on Tata Motors with a target price of Rs 853, warning that the recently imposed 25 per cent US auto import tariffs could severely dent Jaguar Land Rover’s (JLR) free cash flow and overall valuation. It believes that the company may face negative cash flows.

Other foreign CLSA downgraded Tata Motors to 'Outperform' from high conviction outperform in the week gone by. It slashed its target price on Tata Motors to Rs 765 from Rs 930, as it suggested a 14 per cent drop in JLR volumes in FY26 due to trump tariffs. It also expected Ebitda margin to drop to 7 per cent in FY26 and FY27 against 9 per cent in FY25.

Another overseas brokerage firm Nomura had earlier expected the impact of Trump tariffs to be $3,700 or 8 per cent of average selling price. It said even a 50 per cent pass on via price hikes of 4 per cent could impact US auto demand by 8 per cent or 10 lakh vehicles. This is against 1.6 crore new US car sales in 2024.