Tata Motors Passenger Vehicles Ltd (TMPVL, formerly Tata Motors Ltd) reported a consolidated net loss of Rs 5,451 crore for the quarter ended September 30, 2026 (Q2 FY27), after booking Rs 6,738 crore in exceptional losses.
The charges relate mainly to employee separation costs and asset impairment, and Jaguar Land Rover (JLR) accounts for Rs 6,793 crore of them. Consolidated revenue rose 34% year-on-year to Rs 96,920 crore, and profit before exceptional items and tax was Rs 403 crore.
The financials of the company should be seen in the context of a continuing operations basis. The headline year-ago net profit had stood at Rs 76,248 crore due to a one-time Rs 82,616 crore accounting gain from the demerger of its commercial vehicles business.
The company reported a consolidated loss before tax of Rs 6,335 crore. In Q2 FY26 it recorded a loss of Rs 5,462 crore before exceptional items and tax. EBITDA margin improved 630 basis points to 6.2%, and EBIT margin rose 790 basis points to 1.1%.
The company said the year-on-year improvement mainly reflects recovery from the cyber incident at JLR in the same period last year. Sequentially, it said margins were affected by adverse mix and continuing commodity cost pressures.
The company said the loss after tax was recorded after recognition of a deferred tax asset. The quarter had a net tax credit of Rs 884 crore, including a deferred tax credit of Rs 1,745 crore.
Exceptional Items
Employee separation cost was Rs 3,776 crore and impairment of assets was Rs 2,856 crore. Rationalisation and restructuring programme costs were Rs 161 crore, partly offset by a past service cost credit of Rs 55 crore, bringing the net exceptional loss to Rs 6,738 crore.
Employee separation costs and asset impairment together account for Rs 6,632 crore. Q2 FY26 exceptional items of Rs 2,608 crore included Rs 2,008 crore of supplier claims and cyber-related incident expenses, along with Rs 840 crore of employee separation cost. The reported loss therefore does not reflect operating performance alone.
Material Costs
Combined material costs, comprising cost of materials consumed, purchase of products for sale and changes in inventories, rose 35.6% year-on-year to Rs 65,022 crore in Q2 FY27, from Rs 47,946 crore a year earlier. The cost of materials consumed was Rs 58,825 crore and purchases of products for sale were Rs 5,330 crore. Changes in inventories added Rs 867 crore.
Material costs equalled 67.1% of revenue from operations, against 66.3% in Q2 FY26, a rise of about 80 basis points. Material costs grew slightly faster than the 34.0% increase in revenue.
Sequentially, combined material costs rose 7.9% from Rs 60,245 crore in Q1 FY27, against a 1.2% increase in revenue. The ratio to revenue increased by about 420 basis points from 62.9%.
The Q1 figure included a Rs 5,474 crore inventory build that reduced reported costs, whereas Q2 recorded an inventory-change charge of Rs 867 crore. This movement is consistent with the company's reference to adverse mix and commodity pressures, though the results do not separate the effects.
For H1 FY27, combined material costs were Rs 125,267 crore, up 20.8% from Rs 103,681 crore. That equals 65.0% of revenue, against 64.8% a year earlier. The balance sheet shows inventories at Rs 56,755 crore as of September 30, up from Rs 50,126 crore at March 31.
JLR's Q2 revenue rose 20.3% to £5.9 billion, and H1 revenue rose 3.2% to £11.9 billion. EBITDA margin was 6.6% and EBIT margin was 1.1%. Profit before tax and exceptional items was £6 million in Q2 and £115 million in H1, against losses of £485 million and £134 million a year earlier.
JLR said wholesale volumes grew quarter-on-quarter in the UK and overseas markets, offsetting reductions in China and the Middle East. It recognised £530 million in exceptional items, covering restructuring, separation costs and write-downs of intangible assets under development and other assets.
JLR revised its full-year guidance to an adjusted EBIT margin of 2-3% and a free cash outflow of about £1.25 billion. It cited market challenges, geopolitical risks and the exceptional costs recognised in the quarter. Free cash outflow was £540 million for the quarter, and total liquidity was £6.0 billion at September 30. The revised guidance is a more material development than the year-on-year recovery.
PB Balaji, Chief Executive Officer of JLR, said: “JLR delivered positive operating profits in the second quarter and first half of the financial year, despite ongoing global challenges.”
Tata Passenger Vehicles reported revenue of Rs 20,423 crore, up 50.9% and, according to the company, its highest ever for a quarter. Volumes grew 40% and EV volumes grew 90%.
Margins declined despite the growth. EBITDA margin fell 180 basis points to 4.0% and EBIT margin fell 50 basis points to negative 0.3%. Profit before tax and exceptional items was Rs 25 crore, against Rs 156 crore in Q2 FY26. The company attributed the pressure to adverse commodity and foreign-exchange movements.
Shailesh Chandra, Managing Director and CEO of Tata Motors Passenger Vehicles, said: “While steep commodity cost pressures remained a headwind, we responded through calibrated pricing and focused cost actions.”
Consolidated free cash flow was negative Rs 6,300 crore in Q2. Net debt was Rs 50,800 crore at September 30, 2026. Cash and cash equivalents fell to Rs 10,925 crore from Rs 22,880 crore at March 31, while non-current borrowings rose to Rs 74,314 crore from Rs 44,248 crore.
Tata Passenger Vehicles generated free cash flow of Rs 825 crore in Q2 and Rs 1,945 crore in H1. It ended the quarter with net cash of Rs 7,900 crore, comprising cash of Rs 11,000 crore and gross debt of Rs 3,100 crore. The group's cash outflow is concentrated in JLR.
Standalone Results
On a standalone basis, Tata Motors Passenger Vehicles reported revenue from operations of Rs 19,201 crore and a net profit of Rs 3 crore. The standalone notes disclose a Rs 50 crore reversal of provisions for gratuity and long-term compensated absences.
The company had charged Rs 123 crore in FY26 under the new Labour Codes, mainly because of the revised definition of wages. Changes in salary structure during the quarter led to the reversal, which was recorded as an exceptional gain. It is a one-off accounting benefit and does not reflect a change in the vehicle business.
Outlook
The company said global geopolitical volatility, luxury-segment demand, the pace of EV adoption and commodity costs remain key factors to monitor. For JLR, it said near-term priorities are building sales momentum from new EV launches and showing progress on its Enterprise Missions plan, which targets £1.7 billion of savings over two years.
Dhiman Gupta, Chief Financial Officer of TMPVL, said: “In Q2 FY27 TMPV continued to build on its strong momentum in the domestic business, while JLR delivered resilient volumes despite global market specific challenges and wind-down of previous Jaguar models. However, adverse mix and persistent commodity pressures weighed on margins. Both businesses remain fundamentally strong, and we stay focused on executing our medium-term priorities: driving growth through new launches, accelerating cost reductions and improving cash generation.”