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Informist, Thursday, Sept. 25, 2025

By Akash Mandal

MUMBAI – Shares of Tata Motors are likely to fall further in the near term, with traders aggressively adding bearish positions in the options chain due to concerns about the potential loss faced by UK-based subsidiary Jaguar Land Rover following a cyberattack. Tata Motors is already dealing with weak demand overall. Premiums across out-of-the-money put strikes of the company rose sharply, indicating the potential downside for the stock.

Shares of Tata Motors fell after media reports said JLR will shoulder the full bill of damages from the cyberattack as it does not have a cyberattack insurance. JLR suppliers and dealers fear that production in the UK may not resume for several months, a Financial Times report said. The company could take a revenue hit of 3.5 billion euros or INR 364.63 billion and a gross profit hit of 1.3 billion euros or INR 135.43 billion if the UK subsidiary cannot make vehicles until November, the news report cited estimates from David Bailey, a professor at the University of Birmingham.

The stock extended its fall for the third straight session Thursday and closed almost 3% lower at INR 664.30 on the National Stock Exchange. The stock has underperformed peers since the announcement of goods and services tax reforms. It is down nearly 1% so far this month compared to 10% rise chalked up by peers such as Mahindra & Mahindra and Maruti Suzuki India.

In the options chain of Tata Motors, premiums on put strikes INR 600-INR 650 rose 200-240% and open interest addition in these strikes were among the highest compared to other contracts. The highest open interest concentration was at the INR 650 put strike at nearly 3 million. The INR 700 strike has the second-highest open interest concentration of over 2 million. On the call side, the highest open interest addition was at INR 670-INR 690 and the highest open interest concentration was at the INR 700-INR 750 strikes.

Tata Motors already faces tepid demand outlook and is expected to benefit much lesser from the reduction in goods and services tax than its peers. Nearly 47% of the company's top line from India consists of utility vehicles, which have seen a lower tax reduction than smaller cars, Motilal Oswal Financial Services said in a report on Sept. 18.

A significant portion of its portfolio also consists of electric vehicles, which are seen getting less attractive due to the tax cuts across other segments. "Tata Motors' gains in ICE (internal combustible engine) cars may be at the cost of electric vehicle volume (12% of its sales)...hence, we have increased the passenger vehicle division's EBITDA (earnings before interest, tax, depreciation, and amortisation) by just 2% for FY27-28," InCred Equities had said in a report on Sept. 13.

--Nifty 50 September closed at 24962.00, down 149.90 points; 71.15-point premium to the spot index

--Nifty 50 October closed at 25087.40, down 148.40 points; 196.55-point premium to the spot index

--Nifty 50 November closed at 25221.90, down 151.70 points; 331.05-point premium to the spot index

HDFC Bank, Reliance Industries, ICICI Bank, Axis Bank, Bajaj Finance, Infosys, Eternal, Tata Consultancy Services, State Bank of India, Bharti Airtel, Larsen & Toubro, Maruti Suzuki, M&M, and Hero MotoCorp were the most active underlying stocks Thursday.  End

Edited by Ashish Shirke

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