Tata Motors-owned Jaguar Land Rover (JLR), based in the United Kingdom, has held back revenue guidance for FY26 due to macroeconomic pressures including US tariff hikes and weakening demand in China. The luxury automaker expects lower profitability and nearly flat cash flows, prompting a negative reaction from investors.

Jaguar Land Rover Automotive PLC, a UK-based luxury car manufacturer and wholly owned subsidiary of Tata Motors Ltd, Maharashtra, India, has withheld its revenue guidance for the financial year 2025-26 amid concerns of slowing growth in China and increased tariffs imposed by the United States. The announcement triggered a 4% drop in Tata Motors’ shares on June 16.

The company, which contributed 71% to Tata Motors’ total revenue and 79% to its operating profit in FY25, now anticipates a reduction in its operating profit margin to 5–7%, significantly below its earlier estimate of 10% and the 8.4% margin recorded in FY24-25. The revision comes as JLR braces for a spike in tariffs, particularly in the U.S. — its largest market.

In FY25, JLR’s revenue saw a marginal decline of 0.1% to £28.9 billion, while profit after tax fell 30% to £1.8 billion. Retail sales also slipped by 0.6% to 428,854 units. Its free cash flow is expected to fall close to zero from £1.4 billion recorded last fiscal.

JLR’s long-term vision remains intact: it aims to achieve a 15% operating profit margin and pivot Jaguar into an all-electric brand by 2026, discontinuing most existing models like the XE, XF, and F-Type.

The strain has been exacerbated by 25% tariffs on auto imports, imposed by U.S. President Donald Trump in March. JLR paused shipments from its UK and EU plants to assess the impact. Although a free trade agreement between the UK and US in May provided partial relief, tariffs remain higher than before. Vehicles like the Defender and Discovery, exported from EU plants, will now attract up to 1,000% higher tariffs, JLR CFO Richard Molyneux revealed during Tata Motors’ earnings call on May 13.

Analysts from Motilal Oswal Financial Services and Nuvama Institutional Equities caution that JLR may see volume contraction due to geopolitical uncertainties, lower Chinese demand, and rising operational costs, including marketing, warranty, and emissions.

Despite headwinds, the company expects recovery from FY27 as it restructures operations to weather the macroeconomic storm.

Read the full article here: Tata’s JLR Feels the Heat: Tariffs, Trade Wars, and Tough Roads Ahead — For more updates, visit Wittiya – Top Business News, Stock Market Insights & Financial Updates (Wittiya).

Tata Motors Ltd, headquartered in Maharashtra, India, reported an 11% decline in its net profit for FY25 due to margin pressures at its UK-based luxury car unit Jaguar Land Rover (JLR). JLR’s profitability was hit by increased discounts and international trade uncertainties.

Tata Motors Ltd, India’s largest passenger vehicle manufacturer, reported an 11% drop in net profit for the financial year 2024-25. The decline was driven by margin pressure at its UK-based subsidiary, Jaguar Land Rover (JLR), which accounts for nearly 69% of the group’s total revenue.

Tata Motors, part of the Tata Group and based in Maharashtra, is a key player in the Indian and global automotive market, producing a range of vehicles from passenger cars to commercial trucks. Its British arm, JLR, has been a significant contributor to its global presence since its acquisition in 2008 for $2.3 billion.

The company’s consolidated net profit fell to ₹28,100 crore in FY25, down from ₹31,800 crore in FY24. The Ebitda margin shrank by 100 basis points to 13.1% due to lower profitability in JLR, whose own margin fell by 160 basis points to 14.3%. JLR’s revenue remained flat at £28.9 billion.

In Q4 of FY25, Tata Motors posted revenue of ₹1.19 trillion, up just 0.4%, while net profit halved to ₹8,600 crore. The previous year’s profit had been boosted by a deferred tax asset of ₹8,300 crore, making the year-on-year comparison less favorable.

Despite the tough conditions, Tata Motors’ group CFO, P.B. Balaji, highlighted that the company achieved record revenue and profit before tax for its India business and became net debt-free. However, the company refrained from giving forward-looking guidance for JLR, citing evolving trade dynamics, particularly due to tariffs introduced by former US President Donald Trump.

JLR, which gets nearly 25% of its sales from North America, paused shipments to the US in April due to these trade issues. Although exports have since resumed, the company has not yet clarified the full financial impact. The US-UK trade deal is expected to reduce tariffs from 25% to 10%, still higher than the previous 2.5%.

Domestically, Tata Motors saw its passenger vehicle revenue fall 7.5% to ₹48,445 crore and commercial vehicle revenue decline 4.7% to ₹75,053 crore. Global vehicle volumes fell 3% to 366,000 units in the January–March quarter.

Balaji expressed cautious optimism, stating that demand in the UK and Europe is improving. Yet, with geopolitical and economic challenges continuing, Tata Motors’ outlook, especially for JLR, remains uncertain.

Read the full article here: Tata Motors’ Profit Plunges as Global Trade Headwinds Strike JLR — For more updates, visit Wittiya – Top Business News, Stock Market Insights & Financial Updates (Wittiya).