Posted on May 8, 2025, by Niftynews
Tata Motors shares rose sharply by nearly 3% on May 8, 2025, following reports that the US President Donald Trump is likely to announce a trade deal between the United States and the United Kingdom. The announcement is anticipated to have a positive impact on Jaguar Land Rover (JLR), the luxury car division of Tata Motors, especially in light of the ongoing tariff issues affecting auto exports.
Tata Motors Share Price Today: Key Highlights
- Tata Motors share price surged by ₹141.00 (+3.87%), reaching ₹3,783.70 by 10:00 AM (IST) on May 8, 2025.
- The stock had previously opened at ₹3,645.00 and touched an intraday high of ₹3,785.00.
- The deal is seen as a potential boost to Jaguar Land Rover, as nearly one-fifth of JLR’s revenue comes from the US market.
Why Are Tata Motors Shares Rising?
The recent uptick in Tata Motors stock can be attributed to several factors:
1. Potential US-UK Trade Deal
According to reports, President Trump is set to announce a major trade agreement between the US and UK. This deal is expected to include favorable terms for the automotive sector, with a focus on lower tariffs for steel and automobiles, which would benefit JLR. With nearly 20% of JLR’s revenue coming from the US, the potential reduction in tariffs is likely to boost the company’s financial performance.
The tariff relief follows the 25% tariff that was imposed by the US in April, which had caused Jaguar Land Rover to pause its vehicle shipments. Although there have been some reports suggesting that shipments have resumed, no official confirmation has been made.
2. Positive News from India-UK Free Trade Agreement (FTA)
Earlier this week, Tata Motors also received positive news with the India-UK Free Trade Agreement (FTA). Signed on May 5, 2025, the FTA includes provisions for significantly reducing import tariffs on premium cars entering India. Previously, tariffs on luxury vehicles could exceed 100%, but under the new agreement, they are set to drop to 10% within a quota system. This is a major win for Jaguar Land Rover, as it opens up the Indian market for premium vehicles at a more competitive price point.
3. Approval of Tata Motors’ Business Restructuring Plan
Tata Motors also made headlines on May 5, 2025, with the approval of its restructuring plan by shareholders. The company plans to split its passenger vehicle business (which includes Jaguar Land Rover) from its commercial vehicle arm. This move is designed to unlock greater growth potential for both businesses, allowing them to focus on their respective markets and operational efficiencies.
The proposal was overwhelmingly approved by 99.9995% of shareholders, paving the way for the separation of Tata Motors into two listed entities.
What Does This Mean for Tata Motors Shareholders?
For investors in Tata Motors, the news of these developments presents a mixed bag of optimism and caution. On one hand, positive trade developments and restructuring could lead to increased profits and growth, particularly for the luxury car segment. On the other hand, challenges like tariffs and market volatility remain a concern.
Short-Term Outlook
In the short term, the announcement of a potential US-UK trade deal and the India-UK FTA are expected to boost Tata Motors’ stock price. The company’s luxury division, Jaguar Land Rover, stands to benefit the most from reduced tariffs and improved trade relations. This may lead to a further rise in the stock price if the trade deal materializes.
Long-Term Prospects
In the long run, the restructuring of Tata Motors into two distinct entities could unlock substantial growth for both the passenger vehicle division (JLR) and the commercial vehicle division. The market’s response to these changes will be crucial in determining the company’s ability to sustain growth in the highly competitive automotive sector.
Tata Motors Share Price Key Levels to Watch
- Support Level: ₹697 (Strong buying interest is expected above this level)
- Resistance Level: ₹704.50 (A breakout above this could lead to further gains)
The stock is currently trading in a bullish trend above ₹697, with the potential to break through the resistance at ₹704.50. Investors should closely monitor technical levels for signals on further price movements.
Conclusion: Should You Buy Tata Motors Shares?
With the positive news surrounding Tata Motors, particularly its luxury division Jaguar Land Rover, the stock is likely to continue experiencing upward momentum, especially if the US-UK trade deal announcement materializes. The India-UK FTA and company restructuring further add to the optimistic outlook for the stock.
However, investors should also be cautious of potential market fluctuations and ongoing tariff challenges. Keeping an eye on technical levels and trade developments will be crucial in making informed investment decisions.
