JLR cuts margin, revenue guidance as restructuring weighs on Tata Motors
Job cuts and asset write-downs at Jaguar Land Rover (JLR) caused its parent Tata Motors Passenger Vehicles Ltd to record a ₹5,451 crore loss in the September quarter, even as the British luxury carmaker warned of lower profits and revenue this fiscal year.
The Mumbai-based company had posted a ₹76,428 crore profit a year ago, driven by a one-time gain of ₹82,616 crore from the demerger of its commercial vehicle business from Tata Motors. Without the one-time gain, its loss stood at ₹6,368 crore in the year-ago quarter.
Consolidated revenue surged 34% to ₹96,920 crore as sales across both domestic and JLR business rose.
On Friday, JLR lowered its fiscal year 2026-27 (FY27) adjusted operating profit margin forecast to 2-3%, down from 4% in June, citing market difficulties, geopolitical risks, and restructuring costs. It also reduced its revenue forecast to about £25 billion from £26 billion and now expects to spend around £1.25 billion more in cash than it brings in for the year.
While the PB Balaji-led company posted a profit before exceptional items and tax of £6 million in the second quarter, up from a loss of £485 million in the year-ago period, the adjusted operating profit margin of 1.1% remained lower than its full-year guidance of 4% given in June.
The revised guidance is concerning because the earlier 4% forecast had already triggered a sell-off in Tata Motors PV shares in India, as it was well below the company’s near-term target of a 10% operating profit margin.
“Of the £530 million of exceptional charges, £295 million relates to the voluntary redundancy programme that we launched in the quarter and relates to circa 4,000 people, which is our number, that we have suggested out there,” Richard Molyneux, chief financial officer at JLR, said during a post-results media conference on Friday.
“This programme itself has attracted the right level of interest, and we have now circa 3,000 colleagues who have signed up and will leave the business this fiscal year,” Molyneux added.
The restructuring also included a write-down of assets, which the top executive declined to name.
With exceptional items, JLR swung back into a loss of £451 million after posting a £66 million profit in the preceding quarter. The company’s revenue surged 20.3% to £5.9 billion, while sales volume grew 25% to 82,500 units, indicating a revival in volume growth even as profitability declined.
Losses at JLR and weak profitability margins have weighed on Tata Motors PV’s performance since the demerger of its business was completed in October 2025. Tata Motors PV posted a standalone profit of ₹3 crore and 48% revenue growth to ₹19,201 crore in the quarter.
Shares of Tata Motors PV have declined by 22% this year so far, compared with a 1.93% fall in the Nifty Auto, as weak performance at JLR continues to weigh on the firm's financial health.
Tata Motors PV's consolidated net debt has surged over the last six months due to investments in its products and operational restructuring. The net debt has increased from 30,700 crore at the end of FY26 to ₹50,800 crore.
While the domestic PV business remains in net cash of ₹7,900 crore, JLR has ₹53,000 crore of net debt, which has put pressure on deleveraging.
Efforts to improve JLR’s financial performance have drawn investor attention since former Tata Motors chief financial officer P.B. Balaji took over as CEO in November 2025.
Balaji noted in the results that the company posted a profit before exceptional items and tax despite geopolitical challenges, which currently range from higher tariffs in the US to higher commodity costs.
“We are entering a phase of exciting product launches. This, together with our growth plans for the US and disciplined execution of the Enterprise Missions to reduce our breakeven volumes to 300,000 units, positions us well to deliver consistent, cash-accretive growth in the coming years,” Balaji said.
The company is currently in the middle of cost savings efforts to deliver about £1.7 billion in savings over the next two years.
Ayaan Kartik is a Delhi-based journalist tracking the ever-growing world of automobiles and their components. With an experience of five years ranging from short-form news at Inshorts to longform journalism at Outlook Business magazine, he has dabbled into different storytelling formats. At Mint, he tries to regularly mix story styles, from longforms to crisp news stories. He has completed his graduation from Delhi University where he developed a liking for reading and writing about the world we live in today. Apart from automobiles, Ayaan likes to read up on geopolitics which has increasingly affected various sectors of the economy. Of all the promises journalism holds, he likes the fact that it allows a person to simply explain to readers about what is happening in the world. And what better sector than automobiles, which everyone since growing up has seen and felt connected to. Whether it is China's increasing grip on automobiles to growing affection for EVs in the country, Ayaan likes to connect his love for geopolitics and data to his stories as readers become more demanding on the types of stories they want.
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