Why slowing JLR sales may hit Tata Tech, Tata Elxsi

A decline in Jaguar Land Rover's sales this fiscal year may drag down business for Tata Elxsi Ltd and Tata Technologies Ltd, which get more than a fifth of their revenues from the British subsidiary of Tata Motors Ltd.

- Ayaan Kartik & Jas Bardia

Business was already slowing for Tata Elxsi and Tata Technologies, after their European auto clients came under stiff challenge from Chinese rivals. With JLR expecting lower revenue and profit this financial year, things may be about to get worse.

“JLR’s cash flow constraints may delay discretionary spends, but key strategic tech tie-ups are likely to stay on track,” said Sanket Kelaskar, analyst, institutional equity at Ashika Group.

In April-June, the maker of Range Rover SUVs sold 87,286 units, down 11% from a year earlier. One key reason: A pause in shipments to the US in April, after president Donald Trump's administration slapped 25% tariffs on all automobile imports.

Analysts at Nirmal Bang said ina 24 May note that the impact of JLR’s slowdown is one of the top challenges for Pune-based Tata Technologies.