For Tata Motors, JLR Sales A Respite Amid India Struggles

That Jaguar Land Rover has reported strong sales in the third quarter of the ongoing financial year should come as a respite to Tata Motors Ltd. amid dwindling demand at home, analysts tracking the stock have said.

“We now expect JLR to report 9% EBIT margin vs 8.1% earlier, factoring in better operating margin and mix,” BofA Securities analysts Gunjan Prithyani and Eshan Bhargava said in a Jan. 8 note. “Beyond JLR, trends in India have been a bit underwhelming with weak prints in CV and market share slippages in ICE and EV segments in recent months.”

“That said, the outlook beyond Q3 is still vulnerable with external headwinds on demand especially in China and Europe, tighter emissions, model fatigue and rising incentives.”

Wholesales of the luxury unit of India’s Tata Motors Ltd. rose 3% over the year-ago period to 104,427 units in the third quarter of the fiscal ending March 2025, according to an exchange filing on Wednesday. Sequentially, dispatches were up 20%. Volumes were higher in North America and Europe, and lower in China, the UK and other international markets. The Range Rover, Range Rover Sport and Defender made up 70% of the sales mix.

However, JLR’s retail sales disappointed.

Registrations of JLR cars fell 3% year-on-year to 106,334 units in October-December 2024. Sequentially, they were up just 3%. In the nine months through December, retail sales were largely flat at 320,622 units.

“For FY25, we believe JLR’s volumes may be flattish, but a favourable mix should drive 2.5% revenue growth,” Nomura analysts Kapil Singh and Siddhartha Bera said in a Jan. 8 note. “This should aid margins as well.”

Tata Motors is likely to ride the coattails of this growth. At least the stock will.

“We trim India PV EPS by ~4.5%/2.5% for FY26E/27E and introduce a 20% discount in the target multiple for India PVs,” Emkay said in a note. “We retain Buy, amid JLR staying on track for £1 billion in free cash flow this year with net-cash balance sheet, and India CV outlook gradually improving with better profitability.”