Tata Motors Passenger Vehicles expects JLR recovery, maintains margin target
- A cyberattack on JLR, Tata Motors’ luxury unit and Britain’s largest carmaker, hit sales and led to a $177.2mn one-time charge
Tata Motors Passenger Vehicles expects its UK Jaguar Land Rover unit to improve performance in the current quarter and meet its fiscal-year margin target, after the Indian carmaker swung to a third-quarter loss on Thursday.
A cyberattack on JLR, Tata Motors’ luxury unit and Britain’s largest carmaker, hit sales and led to a $177.2 million one-time charge.
The attack last year forced JLR to halt production for five weeks up to early October. It cost the unit $228.5 million in the July-September period, prompting the British government to step in with a 1.5 billion pounds ($2.04 billion) loan guarantee to support the luxury carmaker’s supply chain.
JLR CEO PB Balaji said JLR’s performance in the January–March quarter is expected to improve significantly from previous quarters, as the company reiterated its full-year margin target of 0% to 2%, which it had already lowered twice following U.S. tariffs on imported vehicles and the cyberattack.
Tata Motors also maintained its forecast for JLR’s cash flow at negative 2.2 billion pounds to negative 2.5 billion pounds.
Tata Motors posts sharp fall in quarterly profit on demerger, labour-code charge
The Range Rover SUV manufacturer posted a loss of 34.86 billion rupees ($386 million) for the October-December period, down from a profit of 54.06 billion rupees the previous year.
JLR accounts for up to 80% of its parent’s revenue, with the domestic business forming the remainder. It reported a 43% decline in sales, excluding that of its Chinese joint venture, with normal production levels following the shutdown resuming only around mid-November.
JLR’s quarterly earnings before interest and taxes (EBIT) margin, a closely watched indicator of the company’s operational profitability, slid to negative 6.8%, from positive 9% the year before.
Tata Motors’ domestic business posted a 22% rise in local sales and exports.
The company’s quarterly revenue fell 25.8% to 696.05 billion rupees. Tata Motors’ shares closed 0.4% lower in Mumbai, ahead of reporting results.
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