Tata Motors’ Fundamentals Remain Strong Across Divisions Amid External Challenges, Says Group CFO

Tata Motors’ key business verticals — passenger vehicles (PV), commercial vehicles (CV), and Jaguar Land Rover (JLR) — are on a solid footing despite global macroeconomic headwinds, Group CFO PB Balaji said on Tuesday, as the company prepares for its upcoming corporate demerger.

“The intrinsic fundamentals of each of the businesses — PV, CV, and JLR — are in fine shape. We believe the demerger is positioning them very well to chart their own course,” Balaji said during a media briefing.

Tata Motors announced last year that it would split its passenger and commercial vehicles businesses. According to Balaji, the accounting split will begin on July 1, with the effective business separation to follow on October 1. “The demerger is progressing well, and we hope to have it completed this year,” he said.

Despite global challenges, including tariff issues impacting JLR and other macroeconomic headwinds, Tata Motors closed FY25 with a record turnover of ₹4.4 lakh crore on a consolidated basis and its highest-ever profit before tax (PBT) before exceptional items of ₹34,330 crore. The company also made its largest-ever investment while becoming debt-free at the group level. “All of this indicates that the intrinsic fundamentals of our businesses are in a strong position,” Balaji said.

While Balaji acknowledged near-term challenges for JLR, including the impact of tariffs, he remained confident in the business's resilience.

Last week, Tata Group Chairman N. Chandrasekaran stated that JLR is expected to face a £1.6 billion impact from US tariffs in FY26; however, mitigation strategies are projected to reduce this to £600 million. The luxury automaker's revenue is also projected to decline to £28 billion in FY26, from £29 billion in FY25, due to macroeconomic and industry-specific headwinds. The company has also lowered its EBIT margin guidance for FY26 to 5–7%, down from 8.5% in FY25 and below its earlier target of 10%.

“Despite these numbers and their implications on demand, we still believe we will hold our net cash position and ensure that free cash flow stays close to zero,” Balaji said. “As demand improves, we expect to return to our 10% EBIT journey.”

JLR continues to see strong demand for its Range Rover, Range Rover Sport, and Defender models. Excitement is also building around upcoming launches, including the Range Rover Electric, Range Rover GT, and a new all-electric Jaguar, Balaji noted.

To protect margins, JLR is targeting £1.4 billion in annual cost and cash savings, with plans already underway. EBIT margins for JLR are expected to be in the 5–7% range in the near term.

“Yes, we have a near-term set of challenges to manage, but that is not going to take us off course,” Balaji emphasized. “The turnaround is now well and truly cemented.”