Tata Motors PV slips into a loss in Q2 as JLR woes mount
Jaguar Land Rover, which accounts for 80% of its newly separated parent company’s revenue, has cut its operating profit margin expectation for the 2025-26 financial year from 5-7% to 0-2% amid multiple headwinds, even as it tries to restore production to original levels. JLR predicts ending the year With negative cash flow of 2.2-2.5 billion euros, it moves away from its previous prediction of ending with almost no free cash flow.
Tata Motors Passenger Car Ltd (TMPVL) revenue down 13.5% YoY ₹72,349 crore in the second quarter, according to their filing. The company announced its first quarterly earnings after being spun off from the combined Tata Motors Ltd. ₹6,368 crore for profit in the quarter. ₹ 3,056 crore a year ago.
The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) margin decreased by 11.2 points to -0.1%.
TMPVL was the only company among India’s top four automakers to report a loss for the quarter. Maruti Suzuki India Ltd, Mahindra and Mahindra Ltd and Hyundai Motor India Ltd reported profit increases.
Global winds ease the burden on luxury unit
PB Balaji, outgoing CFO of Tata Motors, said in the post-results press briefing: “It has been a challenging quarter. But we have been fundamentally strengthening our business for many years and will continue to do so. We are confident that JLR will make a comeback.” Balaji will take over as managing director of JLR from November 17.
“The overall global situation remains challenging. To respond effectively, we will focus on stabilizing production and enhancing flexibility across the extended supply chain,” Balaji said, adding that the domestic business community continues to witness strong demand after the implementation of GST 2.0.
This was the second consecutive quarter in which JLR underperformed Tata Motors. Consolidated profit fell nearly 63% in the April-June quarter. ₹3,924 crore ₹10,514 crore a year ago, missing consensus estimate ₹4,055 crore in Bloomberg survey. Consolidated revenues fell 2.5 percent ₹104,407 crore.
This was due to tariffs imposed by US President Donald Trump’s administration in April.
Although the trade deal between the US and UK eased the increase in tariffs from 25% to 10%, before April 2025 the rate was still above 2.5%. North America is JLR’s largest market.
Moreover, China imposed a 10% tax on most luxury cars in the domestic market in July, hurting JLR’s sales.
In the second quarter, a cyber attack on Jaguar Land Rover’s worldwide facilities in September disrupted production at three of the company’s UK manufacturing sites – Solihull, Halewood and Wolverhampton, as well as Pune, India and Nitra, Slovakia. The British luxury carmaker’s total sales fell 24% year-on-year to 66,200 units in the quarter.
Domestic demand compensated for some losses
Revenue up 15.6% in domestic passenger car business as JLR struggles ₹13,529 crore. Sales increased by 10% to 144,397 units.
Profitability was also harmed by high commodity prices, which the company was unable to compensate for through price increases. TMPVL’s pre-tax profit fell over 32% YoY ₹155 crore during January-September.
However, management is confident in strong consumer demand and revenue growth in the coming quarters. New CFO Dhiman Gupta said the company may increase its prices from January to March to offset inflation in commodity prices.
Shailesh Chandra, managing director and CEO of TMPVL, said in the post-results press briefing: “There were very strong bookings that we received in both September and October, which we were not able to fully service during the festive period. Hence, a significant portion of this booking spilled over into November.” he said. “December will be another big retail month. We will have significant bookings that we expect to receive.”
Shares of TMPVL closed 1.62% lower ahead of its earnings release on Friday, against a 0.52% decline in Nifty Auto.
