Tata Motors: In October, Tata Motors created two separate companies by dividing its commercial and passenger vehicle businesses. Since then, there has been a huge decline in the market cap of Tata Motors. The situation is such that Tata Motors, which was once among the top companies of Sensex, is now on the verge of being out of the 30-share benchmark next month.

InterGlobe Aviation, the parent company of the country’s largest airline company IndiGo, can take its place. According to Mcap, it has emerged as the highest ranked non-constituent company. After the demerger in October, the business of Tata Motors commercial vehicles is worth Rs 1.19 trillion, while the mcap of Tata Motors Passenger Vehicles is Rs 1.37 trillion. In comparison, the market cap of Indigo is more than both of them at Rs 2.27 trillion.

Sensex’s old partner Tata Motors

The December review of Sensex is expected by the end of this month, due to which the changes made in the index will become effective after the close of business on December 19. Tata Motors is an old Sensex stock, which has been associated with it since 1986. However, in between the years 2019 and 2022, it has been removed from the Sensex, but was included again.

Sensex was launched on January 1, 1986. Out of the initial 30 stocks of that era, today only 3 stocks are part of it – Reliance Industries, Hindustan Unilever and ITC. Companies like Tata Motors, Tata Steel, M&M and L&T have exited from time to time, which were later rejoined.

What will happen if Tata Motors withdraws from the index?

If Tata Motors is removed from the index, it may come under pressure in the short term as the stock may face outflows of around Rs 2,232 crore. Whereas Indigo may see inflow of around Rs 3,157 crore. If Sensex chooses to increase commodity exposure during this period, then Grasim Industries can join Sensex. Due to this, there is a possibility of passive inflow of Rs 2,526 crore in Grasim. However, Indigo still remains a strong contender.

How does Sensex work?

In Sensex, companies are generally selected from 13 different sectors according to their market cap. The performance of these companies is reviewed twice a year – in June and December. Companies whose shares fall due to weak performance are removed from the Sensex.

This is done so that the top-30 companies included in it are among the well-established companies that boost the country’s economy. The rise in Sensex shows that 30 big companies of the country are moving forward and developing. Due to this, the production capacity of the country is expected to increase and there is a possibility of increase in employment.

Also read:

This IPO was making waves as soon as it was listed, shares rose by 48% in 4 days; betting rich

Tata motors Q1 results: Tata Motors announced the result of the first quarter of 2025-26 on Friday. During this period, the company’s net profit declined by 62.2 percent. With this, the net profit of the company decreased to Rs 4,003 crore in the June quarter. The reason for this is due to the reduction in profit in JRL due to the US tariff, the fall in sales in different segments and the sales have been affected by the closed operations.

Operational revenue also declined

In the Tata Motors Limited (TML) regulatory filing, the auto sector company had recorded a net profit of Rs 10,587 crore in the April-June quarter of the last business year. The company said that its operational revenue in the first quarter was Rs 1,04,407 crore, while it was Rs 1,07,102 crore in the same quarter a year ago. The most impact on the company’s performance in this quarter is the decline in sales in all businesses and mainly in JLR’s profits.

Also read:

SBI Q1 Results: Profit has jumped 12% to 19,160 crores, NPA declines, results increased from estimates

The impact of the announcement of auto tariff from US President Donald Trump has started appearing on the stock market. On March 27, the shares of Tata Motors saw a huge decline in the initial Karabor itself. Tata Motors shares broke with 7 percent price to Rs 661.

In fact, after the announcement of the new tariff from US President Donald Trump, such a decline has been seen in the market. Trump has announced to impose 25 percent auto tariff on all cars imported from abroad from abroad.

Jaguar Land Rover (JLR) is the subsidiary company of Tata Motors, which is the largest market. About one -third of its global sales comes from North America. JLR cars are made in Britain and other countries. In such a situation, these cars will also come under the purview of 25 percent auto tariff. It can be said that this can be said that now JLR vehicles will become expensive in the US market and it can have negative impact on sales.

Also read: Donald Trump imposed 25% auto tariff on cars being imported in America, what is the effect on India?