Tata Motors PV Q2 Hit by JLR Cyber Shock; One-Time Gain Masks Underlying Loss

Tata Motors Passenger Vehicles Ltd. on Friday reported weakness across key earnings metrics for the September quarter, due to the significant impact of the cyber incident at JLR. However, the automaker’s consolidated bottom line came in at ₹74,129 crore, up sharply from ₹3,521 crore in the year-ago period. The jump was purely a result of a notional gain of ₹82,600 crore from the disposal of discontinued operations. 

According to Tata Motors, during a demerger, the accounting standards require companies to record assets at fair value. In the company’s case, the commercial vehicle business being demerged was valued at around ₹94,000 crore by an independent assessor, while its book value stood at roughly ₹11,000 crore. The difference was recorded as an exceptional gain in the profit and loss statement.

However, this gain is purely notional. The same amount is simultaneously treated as a deemed dividend, resulting in an offsetting adjustment in the net worth. As a result, the transaction has no real impact on net worth or distributable profits; it is simply an accounting requirement linked to the demerger process, the company management explained.

Excluding this one-time item, the company posted a loss of ₹6,368 crore for Q2FY26, compared with a profit of ₹3,056 crore in the same period last year. Its operating performance weakened as well. TMPV reported an operating loss of ₹71 crore, versus an EBITDA of ₹9,267 crore a year ago, while consolidated revenue declined 13.5% year-on-year to ₹72,349 crore. TMPV’s consolidated numbers include Jaguar Land Rover and the domestic PV business.

“It has been a difficult period for the business. However, we are committed to emerging from the cyber incident even stronger,” said P.B. Balaji, Group CFO, Tata Motors. “With the demerger completed, both JLR and domestic PV businesses are now positioned to leverage the significant opportunities ahead. Demand situation remains challenging globally but domestically there are signs of resurgence. In this context, our strategy is clear, plans robust and we will continue to execute them with speed and rigour to win.”

In the September quarter, JLR’s performance was significantly impacted by the cyber incident. Revenue fell 24.3% YoY to £4.9 billion (₹57,877 crore), reflecting lost production, the planned phase-out of legacy Jaguar models, continued US tariff pressure, and higher marketing expenses. EBIT margin slipped to –8.6%, from 5.1% a year ago, while the company swung to a loss after tax of £559 million, from a profit of £283 million in Q2FY25. JLR now expects FY26 EBIT margin of 0-2%, and free cash outflow of £2.2-£2.5 billion, but maintains its long-term investment plan of £18 billion over five years.

On a standalone basis, Tata Motors PV revenue rose 15.6% YoY to ₹13,529 crore, though EBITDA margin narrowed by 40 bps to 5.8%. PV (ICE) and EV businesses delivered margins of 6.4% and 4.2%, respectively. Volumes grew 10.8% YoY to 1.44 lakh units, supported by GST rate cuts and festive demand.

The company said it expects to sustain retail momentum in Q3 with strong campaigns, fresh model interventions, and leaner inventories. “Structural cost reductions and improved mix will be key levers for enhancing profitability in the coming quarters,” it added.