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Informist, Monday, Jun. 16, 2025

 

NEW DELHI – Tata Motors Ltd.'s UK-based wholly-owned luxury car arm Jaguar Land Rover Automotive Plc Monday slashed its earnings before interest and tax margin guidance for 2025-26 (Apr-Mar) to 5-7% from 10% in the midst of ongoing global tariff worries and weakness in the Chinese market. Jaguar Land Rover's EBIT margin guidance for FY26 is even lower than the 8.5% recorded in FY25 and the 10.7% registered in the final quarter of the previous financial year. 

 

Tata Motors earned over 70% of its consolidated revenues from the Coventry-based automobile manufacturer. At the session's low, shares of Tata Motors fell as much as 5.6%, before paring losses and trading 3.5% lower at INR 687 on the National Stock Exchange at 1510 IST. Tariffs imposed on car imports by the US, which accounts for nearly 30% of Jaguar Land Rover's global car sales, emerged as a sore point for Tata Motors in recent months after President Donald Trump upped the ante on push for locally-made cars.

 

"(we) continue to engage with the (US) government," the company said. The US-UK trade deal would reduce tariffs on car imports into the US to 10% from 27.5% on up to 100,000 cars a year. This would still be lower than the 25% tariffs US imposes on car imports from other countries. Jaguar Land Rover had temporarily paused shipments of its cars to the US in April and removed certain variable marketing programmes to mitigate losses.

 

In an investor presentation, the company said it has faced risks related to semiconductor shortage, aluminium supplier flooding, and UK thefts and insurance. It is currently facing risks around transition of cars to electric-run variants and outlook in the China market, the Defender maker said. "These challenges all have the potential to impact (JLR) EBIT; we are focusing on building our resilience," the company said in the presentation.

 

The penetration of Jaguar Land Rover's portfolio in the battery electric vehicle space in FY25 was 2%, the lowest among its peers, posing a risk to its long-term ambitions. The company is set to launch the Range Rover Electric this year, following which it plans to launch the first fully electric Jaguar in 2026 as it marches towards fully electric portfolio by 2030.

 

The company expects free cash flow to be close to zero in FY26. The company expects its enterprise missions, excluding tariffs,to allow for a return to an EBIT margin of 10%. 

 

For the March quarter, Tata Motors reported a consolidated net profit of INR 84.70 billion on revenue of INR 1.195 trillion.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Anand JC

Edited by Avishek Dutta

 

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