The Q3 FY26 earnings call revealed a strong domestic performance for Tata Motors Passenger Vehicles (TMPV), driven by successful launches like the Sierra and continued EV momentum, achieving 24% topline growth. However, the consolidated results were tempered by the lingering impact of the JLR cyber incident, which caused nearly a month of production loss. JLR reported a 6.8% negative EBIT margin, though sequential improvement was noted post-Q2 destocking.
Q3 FY26 Earnings Call Overview
The earnings call for Tata Motors Passenger Vehicles Limited (formerly Tata Motors Limited) for the third quarter and nine months ended December 31, 2025, highlighted significant contrasts between the domestic and JLR businesses.
Domestic Business Performance (TMPV)
Key Highlights and Launches
The domestic business experienced a busy launch calendar. The Sierra launch received a phenomenal response, securing 70,000 bookings on the first day. The Punch, leading the subcompact SUV segment, also saw a strong response. Furthermore, the launch of the 1.5-litre Petrol engine for Harrier and Safari broadened customer reach. TMPV also crossed the milestone of 2.5 lakh EVs on the road.
Financial Results
- Topline growth stood at 24%, supported by record offtake volumes of 170,000 units in Q3 FY26.
- EBITDA margin for the quarter was 7%, with EBIT margin at 1.2%, marking a 1% gain quarter-on-quarter.
- Profit Before Exceptional Items and Tax was flat year-on-year at ~Rs. 300 Cr.
- EV growth was very strong year-on-year at about 50%, with volumes moving from 16,000 to 24,000 units. TMPV achieved an exit market share of about 46% in EVs in December.
Future Outlook for TMPV
Management expressed optimism for the remainder of the year. Industry growth is expected to be in the 13% to 14% zone in Q4. TMPV anticipates an industry growth of 8% to 9% for FY26, targeting an industry-leading growth in the mid-teens. The pipeline remains strong with further refreshes, model-year interventions, and the upcoming launch of the Punch EV and Sierra EV.
Jaguar Land Rover (JLR) Performance
Cyber Incident Impact
The quarter was dominated by efforts to normalize production following the cyber incident, which resulted in a loss of almost 50,000 units of production in Q3.
Financial Summary (JLR)
- Wholesale units totaled 59,100 units, while retails were almost 80,000 units.
- Revenue was GBP 4.5 billion, with Average Revenue Per Car rising to GBP 76,000 despite a weaker dollar.
- EBIT was negative 6.8%, noted as an improvement from Q2, largely due to the reversal of the Q2 inventory build-down effect.
- The Defender achieved a notable success by winning the Dakar Rally in its debut class.
Cash Flow and Debt
The cyber incident significantly impacted cash flow, leading to a negative Free Cash Flow (FCF) of ~GBP 18,000 Cr for the quarter. Consolidated net debt for the group stands at ~Rs. 39,000 Cr, with JLR contributing a net debt of ~Rs. 39,000 Cr (while the India business remained cash positive at ~Rs. 5,000 Cr).
JLR Outlook
Richard Molyneux confirmed that guidance for the full year remains greater than 0% EBIT and FCF in the range of negative GBP 2.2 billion to negative GBP 2.5 billion. Key priorities include scaling up production for models like the Range Rover, Range Rover Sport, and Defender, whose order intake is seeing a direct positive influence from the Dakar win (Defender order intake now around 10,000 units a month).
Consolidated Results and Debt
Consolidated revenue for the quarter was ~Rs. 70,000 Cr, down 26% year-on-year. The consolidated loss before tax (before exceptionals) was ~Rs. 3,100 Cr, with the cumulative decline being ~Rs. 9,000 Cr, predominantly driven by JLR.
Investment and Future Strategy
Total investment spending year-to-date reached ~Rs. 3,800 Cr, with Capex investments at ~Rs. 3,100 Cr, expected to conclude the year around Rs. 4,200 Cr to Rs. 4,300 Cr. Both management teams emphasized the need to adjust business models to address adverse market environments, particularly in China, and promised further details at the upcoming Investor Day in mid-June 2026.
Source: BSE
