JLR cyber-attack drags Tata Motors into the red

Core Viewpoint - Tata Motors Passenger Vehicles (TMPV) reported a significant loss in Q2 FY26 due to a cyber-attack on its subsidiary Jaguar Land Rover (JLR), which disrupted production and sales [1][2]. Financial Performance - TMPV recorded a loss of Rs54.62 billion ($616.5 million) in Q2 FY26, compared to a profit of Rs47.77 billion in the same quarter last year [1]. - Quarterly revenue for TMPV fell 14% year-on-year to Rs723.49 billion, with negative free cash flow of Rs83 billion attributed to lower production volumes from the cyber-attack [2]. - JLR's Q2 revenue was £4.9 billion, down 24% year-on-year, with a loss before tax and exceptional items of £485 million, contrasting with a profit of £398 million a year earlier [3]. Operational Impact - The cyber-attack led to a five-week shutdown of IT systems and manufacturing at JLR's facilities, including Solihull, Wolverhampton, and Halewood, with operations resuming in phases starting early October [2]. - Adjusted EBITDA for JLR turned negative at a loss of £78 million, with a margin of 1.6%, compared to a positive EBITDA of £759 million and a margin of 11.7% a year ago [3]. Future Outlook - TMPV has revised its earnings guidance for JLR, lowering its EBIT margin outlook to 0-2% from the previous 5-7% range and warning of potential negative free cash flow of up to £2.5 billion [4]. - The company described the global situation as "challenging" and emphasized the need to stabilize production and enhance resilience across its supply chain [4]. Strategic Positioning - The CFO of Tata Motors indicated a commitment to emerge stronger from the cyber incident, highlighting the potential opportunities in the industry despite challenging global demand [5]. - The demerger of Tata Motors into separate passenger and commercial vehicle businesses became effective on October 1, 2025, marking a significant structural change for the company [6].