Tata Motors PV shares skid 7% after Q2 Loss; JLR performance, guidance cut weigh

Shares of Tata Motors Passenger Vehicles Ltd (TMPVL) tumbled over 7% on Monday after the automaker reported a weak September-quarter performance last Friday. This is the first earnings announcement by the auto major since the demerger of its commercial vehicles business earlier this month.

Investor sentiments were dented after the company slashed earnings guidance of Jaguar Land Rover (JLR), a British subsidiary of the Indian company. The Tata group firm has cut JLR’s EBIT margin guidance to 0–2% from 5–7% and warned of negative free cash flow of up to £2.5 billion.

Weighed down by the development, TMPVL shares of declined as much as 7.3% to ₹363.15 in the  first hour of trade on the BSE. At the time of reporting, the auto heavyweight was down 4.35% at ₹374.55, while its market capitalisation slipped to ₹1.38 lakh crore. The counter saw strong volume as nearly 15 lakh shares changed hands over the counter compared with two-week average of 6.89 lakh stocks.

The demerger of Tata Motors into two separately listed companies — Tata Motors Passenger Vehicles (TMPV) and Tata Motors Commercial Vehicles — became effective on October 1, 2025. TMPV’s shares began trading as a standalone entity on October 14, 2025, with an initial discovered price of around ₹400 per share.

For the September quarter of FY26, Tata Motors PV posted an adjusted net loss of ₹6,370 crore, compared with a net profit of ₹3,056 crore in Q2 FY25. The bottom line was impacted by ₹2,008 crore loss due to the cyberattack at JLR, which disrupted production for most of the quarter.

Excluding exceptional items, TMPVL reported a loss of ₹5,462 crore, versus a profit of ₹4,777 crore a year earlier. Quarterly revenue declined 14% year-on-year to ₹72,349 crore.

The auto company also slipped into the red at the EBITDA level, posting a loss of ₹1,404 crore, compared with an EBITDA profit of ₹9,914 crore in the year-ago quarter.

During the quarter under review, TMPVL recorded a forex loss of ₹361 crore, against a forex gain of ₹436 crore last year. Free cash flow stood at a negative ₹8,300 crore, largely due to lower volumes stemming from the cyberattack.

On a standalone basis, the company reported an adjusted net loss of ₹237 crore, compared to a ₹15 crore profit in the corresponding quarter last year.

Meanwhile, JLR posted revenue of £4.9 billion, down 24.3% year-on-year and 25.5% quarter-on-quarter, as operations were disrupted by the cyberattack and the company phased out older Jaguar models ahead of upcoming launches. Wholesale volumes (excluding CJLR) fell 24.2% YoY and 24.2% QoQ to roughly 66,200 units.

Analysts expect weakness to persist

Brokerages have turned cautious on Tata Motors Passenger Vehicles (TMPV) following weak Q2 performance and significant headwinds at JLR, post demerger.

Motilal Oswal flagged that while the India PV business performed in line with expectations, JLR faces severe challenges beyond the cyber incident, including weak demand in China, the US and Europe and elevated VME levels. With JLR losing 50,000 units of production across Q2–Q3 and guiding FY26 EBIT margins down to 0–2%, Motilal Oswal expects medium-term profitability to remain constrained by US tariff hikes and China’s luxury tax. It has initiated coverage on the demerged India PV business with a ‘Sell’ rating and a ₹312 SoTP-based target price.

“Given the significant challenges at JLR, we initiate coverage on the recently demerged India PV business with a Sell rating and a SoTP based TP of ₹312 per share,” the brokerage said in a report.

JM Financial highlighted similar concerns, noting that JLR’s outlook remains muted amid a challenging demand environment, elevated VME spends and a gradual passthrough of US tariffs over 15–18 months. TMPV’s margin guidance has been cut sharply to 0–2% (from 5–7%), with FCF turning negative.

The brokerage expects the domestic PV business to recover gradually driven by GST cuts and new launches, but downgraded the stock to ‘HOLD’ with a target price of ₹365. “The outlook for the domestic business in 2HFY26 remains strong, with double-digit industry growth expected and overall FY26 growth likely in the 5% range. ICE profitability is expected to remain muted in 3Q but should improve in 4Q with the Sierra launch, price increases, better mix, and cost-reduction initiatives.”

In a similar trend, ICICI Securities flagged the weak operating performance at TMPV, citing the cyber incident-led shutdown as a key driver of JLR’s EBITDAM miss. Domestic PV margins also fell short of estimates. With a bleak near-term demand outlook, elevated VMEs and slow tariff pass through expected, the brokerage cut its stance to ‘HOLD’ and lowered its target price to ₹375, from ₹466 earlier.

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