New Delhi: Shares of Tata Motors Passenger Vehicles Ltd fell more than 8% on Wednesday after its British subsidiary Jaguar Land Rover (JLR) guided for a profit margin well below its near-term target amid tariff-related uncertainties and weakness in China’s premium vehicle market.
Jaguar Land Rover expects a 4% operating profit margin in the current fiscal year (FY27), well below its earlier stated target of reaching 10% in the near term, suggesting that recovery at the luxury carmaker could take longer than expected.
In its investor presentation on Wednesday, projected revenue to rise 13% to £26 billion in FY27 and said it will prioritise growth in North America, including collaboration with Stellantis on Defender-related products. The company’s revenue declined 21% to £23 billion in FY26.
The revenue growth would be a first for the British brand since financial year 2024 when it recorded a 27% rise to £29 billion. However, the revenue target staying below the £29 billion reported in FY24 suggests the company is yet to fully recover from the impact of last year’s and US tariff-related disruptions that hurt sales and profitability.
JLR accounts for more than two-thirds of revenue and profit for Tata Motors.
To be sure, JLR’s guidance of a 4% operating margin this year is below the luxury carmaker’s 5-7% guidance outlined in June last year. JLR ended FY26 with earnings before interest and taxes (Ebit) margins of close to 0%, with a cyber-attack and US tariff-related disruptions imposing additional costs of more than £800 million.
Stock of Tata Motors Passenger Vehicles settled about 8.3% lower at ₹361.05 on the BSE on Wednesday.
During its investor day 2024 presentation, the company had mentioned the near-term goal of reaching 10% operating profit margin by FY26, with the long-term target of taking it up to 15% on the back of cost savings and robust revenue growth.
In its investor day 2025 presentation, the company lowered its target for FY26 after the US imposed import tariffs, but vowed to achieve the goal of 10% operating margin in the near term.
“Targeted cost savings are planned in the areas of material cost, warranty and fixed costs. These ‘Enterprise Missions’ will underpin JLR’s aim to drive £1.7bn of savings and return breakeven volumes towards 300,000 vehicles in the next two years,” the company said in a statement on its investor day.
P.B. Balaji, the chief executive of the British brand who took over in November 2025, said that the company would look to target the North American market to tap the growing potential for luxury vehicles. The commentary comes at a time when the company is facing headwinds in the Chinese market due to imposition of luxury tax and competition from local players.
“As we enter a critical business delivery phase of our Reimagine strategy, launching five new products over the next two years across our incredible House of Brands, now is also the time to evolve our plan to offer global markets greater propulsion choice to unlock growth and build resilience,” Balaji said.
“To truly manifest the power of our brands, we will increase our focus on North America, our biggest market. The rising demand for luxury products coupled with the strong preference we see for our brands signals significant growth potential,” he added.
As part of its cost-reduction strategy, the company has already trimmed its workforce in FY26, with a significant portion coming through a voluntary separation programme for managers that led to the exit of around 500 employees during the financial year.
Mint reported that JLR’s workforce declined by 3% to 42,850 employees – the first such reduction since the pandemic impacted the financial year 2022.
JLR saw sales in the North American market decline 33% in FY26 to 87,000 units while sales in the Chinese market fell 27% to 34,500 units.
The commentary from the British brand has come at a time when troubles at the company have weighed on the performance of its parent .
According to the company’s results released on 14 May, Tata Motors Passenger Vehicles’ full-year revenue fell 8% to ₹3.35 trillion, pulled by a 23% decline in volumes at JLR to 308,000 units. The impact of the cyber-attack in September and higher US tariffs on JLR imports led to an operating loss of ₹1,377 crore from a profit of ₹19,394 crore in FY25.
JLR’s profitability performance has also taken a hit in the past few years, with the company recording a net loss of about ₹2,400 crore in FY26, compared with a profit of roughly ₹21,600 crore in FY25. It recorded a net profit of around ₹27,000 crore in FY24.
