Please ensure Javascript is enabled for purposes of website accessibility

Why Tata Motors' Stock Is Down Today

By John Rosevear - Apr 12, 2021 at 11:52AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rising COVID-19 infections in India's industrial heartland have made investors jittery.

What happened

Shares of Indian automaker Tata Motors (TTM 2.18%) were trading sharply lower in the U.S. on Monday morning. Tata, which is also traded on India's National Stock Exchange (NSE) in Mumbai, was caught in a broad NSE sell-off on Monday on concerns about a new wave of COVID-19 infections in India. 

As of 11:15 a.m. EDT, Tata's U.S.-traded shares were down about 11.8% from Friday's closing price.

So what

Tata and other Indian auto companies including Mahindra & Mahindra and Ashok Leyland closed sharply lower in trading in Mumbai on Monday, after India's second-most populous state, Maharashtra, reported its biggest one-day spike in coronavirus cases since the beginning of the pandemic. 

Maharashtra, in southeast India, is home to much of the country's industry including Tata Motors. After the state reported more than 63,000 new COVID-19 cases on Sunday, investor worries about a potential lockdown drove a broad sell-off of shares of industrial companies located in the region. 

As of late Monday afternoon in Mumbai, officials in Maharashtra had not yet decided whether to impose a full lockdown across the state.

A 2013 file photo showing completed vehicles at Jaguar Land Rover's factory in Pune, Maharashtra state, India.

A factory owned by Tata subsidiary Jaguar Land Rover could be idled if authorities impose a new lockdown amid rising COVID-19 cases. Image source: Jaguar Land Rover.

Now what

Auto investors should keep in mind that much of Tata's profit is generated by its British subsidiary, Jaguar Land Rover (JLR). While JLR does have a manufacturing facility in the city of Pune in Maharashtra, the company builds the vast majority of its vehicles in the U.K., Slovakia, and China. 

Put simply, a lockdown in Maharashtra is likely to be a short-term headache for Tata, not a long-term problem. 


John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tata Motors Stock Quote
Tata Motors
$30.41 (2.18%) $0.65
Mahindra & Mahindra Limited Stock Quote
Mahindra & Mahindra Limited
$15.03 (1.69%) $0.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.