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Investing.com -- Jaguar Land Rover, Tata Motors’ luxury unit, on Monday reported record financial performance for fiscal year 2025 but issued a more cautious outlook for FY26, citing external headwinds.
Shares of Tata Motors (NSE:TAMO) (NYSE:TTM) was down 3.6% at 04:20 ET (08:20 GMT).
According to the company’s Investor Day 2025 presentation, JLR posted £29 billion in revenue, its highest-ever profit before tax before exceptional items at £2.5 billion, and an EBIT margin of 8.5%.
EBITDA reached £4.2 billion, and free cash flow came in at £1.5 billion, the second highest in its history. The company ended FY25 with a net cash position of £278 million, up from net debt of £1 billion a year earlier.
Despite these results, JLR now forecasts FY26 EBIT margins between 5% and 7%, much below its previously targeted 10%.
Free cash flow is expected to be close to zero in FY26, with improvements projected in FY27 and FY28.
The company cited macroeconomic risks, evolving emissions regulations, and shifting market dynamics, particularly in the battery electric vehicle (BEV) segment.
Retail and wholesale performance remained strong in FY25. Defender reached record wholesale volumes of 115,000 units, and Range Rover Sport grew 20% year-on-year.
Plug-in hybrid electric vehicle (PHEV) retail sales rose 22%, and average revenue per unit surpassed £70,000, a 26% increase from FY21.
In China, JLR outperformed the shrinking premium segment, which declined 15% year-on-year. The company led the high-price SUV category with average transaction prices over 700,000 RMB.
In the United States, JLR responded to new 27.5% tariffs on vehicles produced in Slovakia by temporarily pausing shipments and adjusting pricing strategies.
Investments totaled £3.8 billion in FY25, the third highest in company history, as part of a planned £18 billion investment through FY28. Spending focused on vehicle platform development, electrification, and software-defined vehicles.
JLR flagged progress on its Modular Longitudinal Architecture (MLA), Electrified Modular Architecture (EMA), and Jaguar Electrified Architecture (JEA), completing over 13,000 system tests and 4 million miles of durability testing.
To address upcoming risks, JLR outlined enterprise missions targeting £1.4 billion in annual value, excluding tariff effects. Focus areas include emissions compliance, cost controls, and digital transformation.
JLR’s performance contributed 71% of Tata Motors’ consolidated revenue and 80% of its profit before tax before exceptional items in FY25.