Stock Crash: Early in the morning, news came from America, this stock of Tata Group collapsed

The stock of Tata Group's auto company Tata Motors is witnessing a huge decline of about 6% today. This stock is under pressure today after a decision by US President Donald Trump. Trump has announced a 25% tariff on cars and light trucks imported into the US. He said that this tariff will be in addition to the existing tariff. This will also be implemented from April 2 and its recovery will start from April 3.

Apart from commercial vehicles, Tata Motors is also the parent company of Jaguar Land Rover (JLR). America is a major market for JLR. In the year 2024, about one-third of its sales came from North America. A large part of this was from America. 22% of JLR's total came from America.

Management gave guidance to become debt free Tata Motors management recently confirmed that JLR will meet its fourth quarter guidance of 10% EBIT margin and will become net day free by the end of the current financial year. After this statement of the management, the stock saw a recovery from Rs 606 i.e. 52-week low. Also read: Trump's 25% tariff on auto companies caused shares of Indian companies to crash - what will happen next The risk-reward of the stock is better After talking to the management, many brokerage firms said that they will wait for more clarity on the tariff aspect. There is still uncertainty about this. However, many suggested that the risk-reward of Tata Motors shares has now become favorable after the stock's sharp decline from its July 2024 peak. CLSA has a "high conviction outperform" rating on Tata Motors and said in a note on March 12 that the stock is trading at 1x on FY27 EV-to-EBITDA, well below the ideal multiple of 2.5x. Nuvama said the same day that if the US imposes tariffs, JLR will have to balance it through price hikes and cost savings.

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