Tata Motors PV narrows Q2FY27 loss to ₹5,451 cr as revenue rises 34%

Tata Motors Passenger Vehicles (TMPV) reported a consolidated net loss of ₹5,451 crore from continuing operations for the second quarter of financial year 2026-27 (Q2FY27), narrowing from a loss of ₹6,368 crore a year earlier, as recovering Jaguar Land Rover (JLR) volumes helped offset restructuring costs and asset impairments.

Consolidated revenue from operations rose 34 percent year-on-year (Y-o-Y) to ₹96,920 crore from ₹72,349 crore, supported by a recovery at JLR following the cyberattack-related disruption in the year-ago quarter and strong growth in the domestic passenger vehicle (PV) business.

The company incurred exceptional charges of ₹6,738 crore during the quarter, primarily comprising employee separation costs and asset impairments. On a reported basis, the company posted a consolidated net loss attributable to shareholders of ₹5,531 crore, compared with a profit of ₹76,170 crore a year earlier. However, the year-ago figure included a substantial exceptional gain arising from the demerger of its commercial vehicle (CV) business, making the reported profit figures not directly comparable.

The consolidated earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin stood at 6.2 per cent, an improvement of 630 basis points (bps) Y-o-Y, largely reflecting recovery from the cyber-incident at JLR in the corresponding period last year. Sequentially, margins were affected by an adverse product mix and persistent commodity cost pressures.

TMPV shares fell 3.31 per cent to close at ₹287.40 on Friday.

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JLR reported revenue of £5.89 billion during the quarter, up 20.3 per cent Y-o-Y, as wholesale volumes recovered in the UK and overseas markets. However, lower volumes in China and West Asia, along with an adverse market and model mix, continued to affect profitability. JLR's profit before tax (PBT) and exceptional items stood at £6 million, against a loss of £485 million a year earlier. Its Ebitda margin improved to 6.6 percent.

The British luxury-car maker recognised exceptional charges of £530 million during the quarter towards restructuring activities, including employee separation costs and asset impairments.

JLR management said £295 million of the exceptional charges related to its voluntary redundancy programme targeting around 4,000 employees. Around 3,000 employees had already signed up, with the majority expected to leave on November 30. The remaining charges largely comprised asset writedowns.

The management said China remained a challenging market, and the company could not be certain that the decline in sales had bottomed out. JLR was reassessing its approach to the Chinese market while maintaining disciplined dealer inventories and avoiding excessive discounting.

Amid continuing geopolitical uncertainties, inflationary pressures, and market challenges, JLR revised its full-year guidance to an adjusted Ebit margin of 2-3 per cent and free cash outflow of around £1.25 billion.

P B Balaji, chief executive officer (CEO) of JLR, said the company delivered positive operating profits in Q2 and the first half (H1) of FY27 despite global challenges.

"With the proposed arrival of Range Rover GT and a new electric Defender product in the new year, we are entering a phase of exciting product launches," Balaji said.

He added that the company's growth plans for the US and its Enterprise Missions cost-reduction programme, aimed at reducing breakeven volumes to 300,000 units, positioned it for consistent, cash-generating growth.

The domestic PV business, meanwhile, recorded its highest ever quarterly revenue of ₹20,423 crore, growing 50.9 per cent Y-o-Y. However, its Ebitda margin contracted by 180 bps to 4 per cent, while its Ebit margin remained negative at 0.3 per cent.

Shailesh Chandra, managing director (MD) and CEO of TMPV, said the company had been able to offset only around 40 per cent of the impact of rising commodity costs through calibrated price increases and cost reductions, absorbing the remaining pressure on its profitability. Steel, rubber, and copper prices were expected to remain elevated in Q3FY27, although some moderation was visible in precious metals.

The company is also considering a larger price increase in Q4FY27. "In Q4, we might go for slightly higher price increase as compared to what we have been taking," Chandra said during the earnings call. He expects profitability to remain around current levels in Q3 before improving in Q4 through pricing and cost-reduction measures.

Chandra said the company recorded quarterly sales of over 200,000 units, with volumes growing 40 per cent Y-o-Y. Electric vehicle (EV) sales rose 90 per cent during the quarter.

He clarified that the company was not sacrificing profitability to gain market share. With demand currently exceeding supply, market-share gains were a consequence of meeting customer demand rather than aggressive discounting. Chandra also expects India's PV industry to grow around 12-13 per cent in FY27, with growth moderating to approximately 5 per cent in H2FY27 because of a higher base. He said discounts had been declining over the past two to three quarters and did not foresee a return to widespread discounting in the near term.

Tata Motors to ramp up EV supplies to 20K units a month

TMPV plans to ramp up EV supplies to nearly 20,000 units a month over the next two to three months, from around 16,000 currently, as demand continues to outstrip supply. Shailesh Chandra, MD & CEO, said the company was currently able to meet only around 60-65 per cent of EV demand. Monthly supplies have already increased from around 9,000 units in March-April to 16,000 units.

"All the factories are running at full capacity, if not more," Chandra said, adding that the company was closely monitoring supplies of 26 components to support the production rampup. He said the company's in-house manufacturing capacity was flexible enough to shift between internal combustion engine (ICE) and electric vehicles, but supplier-side constraints remained a challenge. Tata Motors currently has around 10 days of EV inventory at dealerships, with significant pending bookings.