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Cyberattack hits Q2 results

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China demand and luxury tax hurt sales

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JLR generates most of Tata Motors' profits

By Kashish Tandon and Chandini Monnappa

Nov 14 (Reuters) - Tata Motors Passenger Vehicles

cut its fiscal 2026 margin goal for Jaguar Land Rover

on Friday after a cyberattack disrupted production at the luxury

automaker, adding to pressure from soft demand in China and chip

supply constraints.

JLR, which generates most of Tata Motors' profits, is grappling

with falling demand for premium cars in China and component

shortages after chipmaker Nexperia B.V. warned it could no

longer guarantee deliveries due to a political standoff between

China and the Netherlands.

A cyberattack in early September at Britain's biggest carmaker

halted production for five weeks and forced JLR's parent to take

a one-time charge of $228.5 million in the second quarter.

The Defender maker now expects an operating margin of 0% to

2% in fiscal 2026, down from an earlier 5% to 7% target, having

already pared its outlook this year amid tariff-related

uncertainty.

It projects negative free cash flow of 2.2 billion to 2.5

billion pounds ($3 billion-$3.4 billion) for fiscal 2026,

reversing its earlier forecast of breaking even.

JLR WHOLESALE VOLUMES SLIDE

JLR CEO Adrian Mardell told reporters the investigation into

the cyber incident was ongoing but gave no details, adding that

operations were "pretty much back running as normal now."

The results also marked the first quarterly earnings since the

Tata Motors Group separated its passenger vehicles business from

its commercial vehicles unit.

Tata Motors Passenger Vehicles reported a 22-fold surge in

quarterly net profit thanks to an 826-billion-rupee ($9.4

billion) demerger gain. Excluding the gain, the company reported

a 6.37-billion-rupee loss, weighed down by a sharp drop in JLR

volumes.

JLR's wholesale volumes, excluding sales from its Chinese

joint venture, were down 24.2%.

"China is definitely a concern," said Mardell, who is set to

leave the company after three decades. He added that a recent

change in luxury tax now covered many Range Rovers and was

weighing on sales.

A report last month estimated that the hack at JLR cost the UK

economy $2.55 billion. JLR runs three factories in Britain

producing about 1,000 cars a day.

Data on Thursday showed the British economy barely grew in the

third quarter, weighed down by the disruption.

($1 = 87.8950 Indian rupees)

($1 = 0.7451 pounds)

(Reporting by Kashish Tandon and Meenakshi Maidas in Bengaluru;

Editing by Nivedita Bhattacharjee and Emelia Sithole-Matarise)