For Tata Group chairperson N. Chandrasekaran, Tata Motors Ltd has been one of many conglomerate’s standout performers in recent times—rising to 3rd spot in a market dominated by Maruti Suzuki India Ltd and Hyundai Motor India Ltd.
In Chandrasekaran’s letter to shareholders as a part of Tata Group’s holding firm Tata Sons’ newest annual report, the auto enterprise discovered a particular point out.
“Let me pause and point out one instance that exemplifies the very best of what we will do: Tata Motors,” Chandrasekaran mentioned in his letter.
“With barely 5% share in passenger autos in 2017, it appeared an implausible concept that Tata Motors might launch India’s first electrical automobile in beneath one yr from design to manufacturing, that its market place might rise from sixth to top-3 within the Indian market, that it might rework from a debt of INR 62,000 Cr to internet money constructive standing,” he wrote.
Nonetheless, some wrinkles are showing within the Tata Group’s auto enterprise, which can fear Chandrasekaran, who heads the board of the Mumbai-based Tata Motors.
After practically 4 years of speedy development publish the covid-19 pandemic, development momentum for Tata Group’s two flagship auto companies—the publicly listed Tata Motors and the privately held Tata AutoComp Programs Ltd—is faltering.
Tata Motors is within the enterprise of creating and promoting vehicles within the home and worldwide markets, whereas Tata AutoComp manufactures auto elements.
The 2 companies noticed their revenue drop in monetary yr 2025 amid rising competitors and declining development in each home and worldwide auto markets.
Whereas Tata Motors noticed its consolidated FY25 internet revenue fall by 12% to ₹28,149 crore for the primary time in 4 years, Tata AutoComp’s internet revenue practically halved to ₹735 crore, Tata Sons’ newest annual report revealed.
Tata Motors consolidated income battle largely flat year-on-year in FY25 at ₹4.39 trillion. Nonetheless, for the primary time because the monetary yr 2020, Tata AutoComp’s income declined to ₹13,095 crore in FY25 from ₹13,722 crore within the yr earlier than.
With each car and auto components companies dealing with headwinds owing to US tariff threats and slowing development, analyst projections for this yr usually are not rosy for the conglomerate’s auto enterprise.
Analysts highlighted the slowdown within the efficiency of Jaguar Land Rover which can affect Tata Motors as practically three-fourth of its consolidated income and revenue come from the UK-based firm.
“We’re constructing in a subdued 3% income CAGR over FY25–27E owing to quantity lower at JLR (3% CAGR) and muted development within the India CV (2% CAGR) division,” analysts at Nuvama Institutional Equities wrote in a 16 June Be aware on the efficiency of Tata Motors.
“In JLR, discontinuance of ‘Jaguar’ ICE fashions, lack of market share within the China area and imposition of tariffs within the US shall result in quantity contraction forward. Moreover, we reckon a muted efficiency within the India CV division owing to cheap utilisation ranges at transporters, growing competitors from Railways and a excessive base.”
Within the monetary yr 2025, Tata Motors noticed complete passenger and business automobile gross sales fall by 4% to 912,155 models. JLR is dealing with a troublesome operational surroundings as the corporate has to pay larger tariffs in its greatest market, North America, whereas its third greatest market, China, has elevated the online of luxurious tax on automobiles.
Throughout April-June, the primary quarter of this FY, the maker of Vary Rover SUVs offered 87,286 models, 11% fewer than a yr in the past, as a consequence of a pause in shipments to the US in April to evaluate the tariff affect.
With Tata Motors’ general financials depending on the efficiency of the UK-based firm, the going might get more durable.
Muted efficiency of the auto enterprise might weigh on Tata AutoComp which will get practically one third of its income from Tata Group entities. The producer of auto elements, which was based in 1995, has practically 61 vegetation throughout India, North America, Latin America, Europe and China.
The corporate is at present headed by Manoj Kolhatkar, who joined in December after a 13-year stint at Gabriel India.
Elements gamers are already dealing with a number of headwinds through the present monetary yr. Analysts word that the expansion surroundings for the nation’s auto element gamers is turning into more and more difficult.
“We determine three key dangers for Ancs- USMCA/tariffs (ancillaries – US Mexico Canada Agreememt), EU weak point and Chinese language competitors, and EVs – given the business’s export reliance on US/EU and good salience of engine elements,” analysts at Ambit Institutional Equities wrote in a 25 April word.
Being privately held, the element enterprise is spared the scrutiny of public traders. Nonetheless, shares of Tata Motors have lagged the general market to this point in 2025. The share value of Tata Motors has declined by 6%, whereas Nifty Auto has risen by 4% to this point this calendar yr.
Nonetheless, for Chandrasekaran, the story of turnaround within the car enterprise, which led to the robust development, remains to be notable. Throughout the firm’s annual basic assembly held in June, the chairperson had a message for the shareholders of its flagship auto enterprise.
“I had the chance to continuously share updates with Ratan Tata concerning the enterprise in the previous few years. Whereas all of us miss him, I need you to know that he would have been very happy with the turnaround of the enterprise as Tata Motors was very near his coronary heart,” Chandrasekaran advised shareholders.