Tata Motors In Sell Zone As JLR Cyberattack Puts £2 Billion Loss On The Table

(MENAFN- AsiaNet News)

Tata Motors' shares fell as much as 2.6% to ₹665 on Thursday after the Financial Times reported that its unit Jaguar Land Rover (JLR) is poised to incur the entire cost of a major cyberattack, having failed to secure insurance coverage.

It was the top decliner on the benchmark Nifty50 index.

Cybersecurity Breach

JLR was forced to shut its IT systems on September 1 after it was reported to have been hacked. This led to disruptions across manufacturing, retail, and supply chain operations. The company's three UK plants, which typically produce around 1,000 cars per day, have been idle for more than four weeks, reportedly impacting 33,000 employees.

The cyberattack has forced JLR to halt production, initially until September 24, and later extended to October 1.

Mounting Costs

While the company has not provided an official estimate of the financial damage, reports indicate losses of nearly £50 million per week. If the estimates are accurate, JLR could be hit with a bill of around £2 billion, a figure that would exceed its full-year profit after tax of £1.8 billion for 2025.

This setback comes at a critical juncture, as JLR contributes a significant share of revenue to parent company Tata Motors, accounting for roughly 70% of its consolidated topline.

The automaker was negotiating a cyber insurance policy via broker Lockton but had not finalized it when the attack struck, leaving it fully exposed to the financial fallout.

Analyst View

Tata Motors shares trade in a strong sell zone, with daily and midterm moving averages flashing bearish signals. The relative strength index (RSI) readings are deep in oversold territory, suggesting scope for a technical rebound if sentiment shifts, said SEBI-registered investment advisor Nidhi Saxena of The Trade Bond.

Strong resistance lies in the ₹700 - ₹710 zone, while support can be seen between ₹640 and ₹660 should the decline persist, she added.

The potential £2 billion hit to JLR could overshadow Tata Motors' full-year profit, creating a direct earnings shock with no insurance cover to soften the blow.

The production shutdown, now extended into October, disrupts revenue flow and cash conversion, while also straining suppliers, a ripple effect that may force government intervention, Saxena said.

The UK government is reportedly weighing emergency support for JLR's supply chain, but any such relief would be tactical and uncertain.

Tata Motors: What To Watch?

Key triggers to watch include Tata Motors' disclosure on the financial impact and cash buffer, the timeline for restarting JLR operations, and supplier resilience. Market sentiment will also hinge on signals from the UK government, as well as broader auto demand, interest rates, and global macroeconomic trends.

Given the uninsured losses and uncertainty, the stock looks high-risk, making a cautious stance important until a clear recovery plan is outlined, she said.

What Is The Retail Mood?

Tata Motors was the top trending stock on Stocktwits on Thursday.

Retail sentiment on the platform fell further to 'extremely bearish'. It had been 'bearish' since around the time JLR announced the cyber breach. 

Tata Motors' Sentiment Meter and Message Volumes at 10:30 a.m. IST on September 25 | Source: Stocktwits

The stock has shed 3.6% since the cyberattack, and has declined over 10% so far this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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