Tata Motors Passenger Vehicles (TMPV) saw a significant drop in its shares on Monday, experiencing a 6% decline in morning trading following the release of disappointing Q2 FY26 results. The sharp decrease was primarily driven by substantial losses at Jaguar Land Rover (JLR), a notable reduction in its full-year margin forecast, and a larger-than-anticipated impact from a recent cyberattack that disrupted operations.
The stock opened at a lower price of approximately Rs 369, marking a 5.7% decrease from Friday’s closing price of Rs 391.2. Investors closely monitored these results as it marked Tata Motors PV’s initial quarterly update as an independent entity. Nevertheless, concerns regarding JLR’s financial performance and the broader global slowdown in luxury car demand overshadowed the achievements of the PV segment.
JLR faced significant challenges in Q2, leading to a revision of its full-year EBIT margin projection to 0–2% from the previous 5–7%. Additionally, the company anticipated a free cash outflow ranging between GBP 2.2–2.5 billion. During the quarter, JLR reported a loss of GBP 485 million before tax and exceptional items, with a 24.3% year-on-year decline in revenue to GBP 24.9 billion. The cyber incident in September disrupted operations for several days, resulting in negative margins.
Excluding the one-time gain from the commercial vehicle demerger, the PV division would have incurred a loss of Rs 6,370 crore, a significant contrast to the Rs 3,056 crore profit recorded a year ago. On a standalone basis, TMPV disclosed an adjusted loss of Rs 237 crore. While revenue exhibited a 6% increase to Rs 12,751 crore, EBITDA decreased sharply to Rs 303 crore from Rs 717 crore, leading to a decline in margins to 2.4%.
Various brokerages adopted a cautious stance, citing uncertainties surrounding JLR’s recovery and the repercussions of production disruptions. Jefferies maintained an ‘Underperform’ rating with a target price of Rs 300, cautioning that the effects of the cyberattack may extend into Q3. The brokerage highlighted multiple concerns at JLR, including changes in China’s consumption tax, intense competition, aggressive discounting practices, challenges related to the shift to battery-electric vehicles, and an aging model portfolio.
Goldman Sachs retained a ‘Neutral’ view with a target of Rs 365, emphasizing that JLR’s EBITDA significantly underperformed expectations. The management anticipated a loss of 30,000 units in production during Q3, surpassing the 20,000 units impacted in Q2.
CLSA expressed a positive outlook, issuing an ‘Outperform’ rating and raising the target price to Rs 450. While acknowledging JLR’s EBIT margin of -8.6%, worse than anticipated, CLSA highlighted India PV’s stable 5.8% EBITDA margin. The brokerage suggested that GST reductions on smaller SUVs and sustained demand could bolster the domestic PV sector, despite the subdued FY26 outlook for JLR.
The divergence in analyst opinions indicates that although the India PV segment remains resilient, it is insufficient to counterbalance the challenges faced by JLR. This disparity heavily influenced investor sentiment, leading to a significant decline in TMPV shares.