Sequentially Better, but JLR Concerns

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Sequentially Better, but JLR Concerns

V Source: FactSet, Jefferies

transition, while its key models (RR, RR Sport and Defender) are now 3-5 years old. While EV

launches will start in FY27, JLR said that ICE offerings will also be required for longer. On the

positive side, JLR said that demand is holding well in the West, and it will cut costs by £1.7bn Exhibit 1 - JLR sequentially better

over two years reducing break-even volumes to 300K. For FY27-28, we expect 9% volume 120 JLR Wholesales (excl China JV, K units) JLR: EBITDA margin (%, RHS) 30

CAGR, 10-10.5% EBITDA margin, with FCFE remaining negative in FY27. 10080 2520

60 15

Delivering well in India but near-term margin pressures: India's passenger vehicle (PV) 4020 105

registration growth has improved from 3% YoY in Apr-Jul to 18% in Aug-Apr, although higher 0 0

retail fuel prices and weak monsoon could pose some headwinds. We assume 8% industry (20) 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 4Q26 (5)

volume CAGR over FY26-28. Tata's market share has improved from 5% in FY16 to 13-14% in .Source: Company data, Jefferies

FY23-FY26, and its new SUV Sierra is getting good response. Tata's EBIT margin also improved

Exhibit 2 - Good EBITDA growth in Indiain Mar-Q, although it expects 3-4% incremental commodity cost headwind in Jun-Q, partly 20 PV EBITDA (Rs bn) PV EBITDA margin (%, RHS) 10

offset by ~0.5% price hike in Apr. For FY27-28, we expect 14% volume CAGR and 8-8.2% 15 8

EBITDA margin. 6

Retain UNPF: We fine-tune FY27-28 earnings mainly factoring higher margins for India PV but 5 2

lower volumes for JLR. We expect FY27-28 to be better years for TMPV vs the cyberattack- 0 0

1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 4Q26

impacted FY26; however, our FY28 EPS is still 26% below FY25.