Speed-breaker in sight for TaMo's JLR?

Tata Motors Ltd’s (TaMo’s) British subsidiary, Jaguar Land Rover Automotive Plc (JLR) has come a long way—from failing to meet the margin target in FY23 to raising the guidance in FY24. Recall that in FY23, JLR had clocked an Ebit (earnings before interest and tax) margin of 2.4%, lower than the 5% guided when the year began. For FY24, it has raised Ebit margin target to 8% from 6% plus earlier. 

- Vineetha Sampath

JLR expects volume in the second half of FY24 to be better led by higher production and capacity expansion for high-margin products—Range Rover and Range Rover Sport models. In the September quarter (Q2FY24), JLR’s Ebit margin fell by 130 basis points (bps) sequentially to 7.3%, led by low-margin products.

While FY24 is likely to be a strong one for JLR, the next fiscal year could break the momentum. Demand concerns cannot be ruled out for JLR even though it is a luxury brand.