India surges, JLR collapses: margin squeeze masks underlying momentum

India +46% YoY, but group revenue -8.2% YoY; JLR collapsed 10% wholesale

EBIT margin fell to 2.4%; NPM collapsed to 0.9% (from ~4% implied); commodity 4.5% barely offset

Only 34k EV units (20% mix); constrained by supply, not demand; booking > supply signals execution gap

PBT halved to GBP 109M from GBP 351M YoY; defensive language masks weakness

Claimed $3,500 → $3,150/ton, but JLR profitability still halved; VME spiked to 7.1% (real margin killer)

4.5% hit in Q1 (vs. guided as risk); Q2 expected 3% more; only 1% price offset taken, margins compressed

Richard said FY27 guidance 'not inconsistent' with weak Q1; PBT GBP 351M → GBP 109M (-69%); implies lower expectations but not officially cut

Wholesale down 25% YoY at JLR; new luxury taxes post-Q1 creating additional headwind vs. prior expectation of stabilization

Grew 37% → 43% in one year; 8-10 month waiting on Punch.ev; supply-constrained, not demand-constrained (positive signal)

6 launches detailed (Range Rover Electric Sep '26, Jaguar Type 01 early '27, Range Rover GT, others); peak volumes defined (12k FY27 EVs)

Middle East adjusting to new routes (Strait of Hormuz bypass); Jaguar ~1,500 units down this quarter, run-out complete in 3-6 months; Type 01 starts early '27, no material FY27 impact, upside FY28+. Fire resolved.

Competitive benchmarking forces calibration; cannot take full increase without losing share; strategy is accelerate cost reduction + frequent calibrated increases vs. one steep hike

30 days inventory (below comfort); targeting 70k units/month (up from 63k); constrained by labor, geopolitics, rainfall; aiming 65k+ Sept onward

Targeting higher double-digit volume growth (vs 46% in Q1); margin strategy: offset all commodity via price + cost reduction, aim to neutralize headwinds

Bookings 3.5x pre-Mid-East crisis average; Tiago.ev + Sierra.ev launches drove growth; ramping capacity 9k → 15k/month; still supply-constrained

Expect at least margin neutral; Range Rovers with EV powertrain priced at parity; EMA cars replacing end-of-life low-margin vehicles; risk is cannibalization, but expressions of interest suggest minimal overlap

China unlikely to ease; probably worsen before stabilizing; domestic overcapacity, retailer stress; new luxury taxes post-Q1 added headwind; JLR disciplined on retailer stock days

Engine casting constrained (petrol + diesel); sheet metal stress on shared capacity; industry demand 350k → 450k created press issues; improvement from Aug-Sep; major capacity boost Oct

Market share 37% → 43% in one year via enhanced value propositions (Punch.ev 8-10 month wait) + new launches (Sierra.ev, +1 more FY27, +2 refreshes); confident protect/grow despite competition; Rs. 7L-30L range coverage

Early-stage growth; South Africa opened last year, 4x growth on low base; targeting 2x growth FY27

Nexon.ev + Harrier.ev qualified; Tiago.ev, Punch.ev, Sierra.ev, Curvv under certification; expect Q3 accrual start; Q4 most portfolio PLI accredited

Aluminum biggest exposure (cars aluminum vs steel); aluminum fell Q1 ($3,500 → $3,150/ton); hedging mitigated moves; quarterly contract lag means Q2 will see some prior-quarter inflation; 'not too bad' logic questioned by low JLR profit

Originally 2026 end, delayed to 2027 due to platform shift to Freelander (CJLR); significantly premium to Safari (democratizes luxury experience)

Hedge ~1.28; prefer weak sterling (1.20s > 1.30s) as largest UK exporter; hedge marked-to-market on balance sheet; Stellantis MoU provides natural hedge if realized

In constant contact with rating agencies; on borders of investment grade but negative watch likely to remain; guidance not dropped, 'not inconsistent' with weak Q1

Range Rover Electric launch Sep '26; 6 launches total coming; FY27 ~12k EV units penciled; FY28+ will keep posted as launches roll

Q1 at 46%; aiming to sustain momentum but growth rates likely to moderate H2 on higher base (industry saw 24% YoY in Q1 from low base)

Forward-looking strategic intent; no FY27 specific number; focused on US market (40% world millionaires, SUV propensity, brand affinity)

Q1: 1% price vs 4.5% commodity = -350 bps gap; Q2: 0.5% more price (Jul not in Q1) + cost reductions + 1% PLI benefit vs 3% more commodity = still gap; 'flattish' Q2 vs Q1 expected

PLI accruals start Q3; 2% cost reduction achieved in Q1, more expected; refreshed portfolio (Tiago, Sierra, Curvv) to drive margin

Following Investor Day guidance; next phase capex tied to production ramp and new model launches

Range Rover/Range Rover Sport Electric (H2 '26), Jaguar Type 01 (early '27), Range Rover GT; capitalization 74% in Q1

4.5% impact in Q1, 3% more expected Q2; only 1% price increase taken (limited by competition); cost reduction 2% YoY insufficient to offset; residual gap on margin

PBT halved Q1 YoY (GBP 351M → 109M); VME spiked to 7.1% (primary driver); Jaguar run-out and supplier fire temporary, but underlying VME structural in competitive markets

Sierra severely impacted by engine casting constraints (petrol + diesel); sheet metal stress from industry demand surge (350k → 450k units); delays to Q3-Q4 production ramp

JLR China revenue 13%; wholesale down 25% YoY; new retrospective luxury taxes post-Q1 added unexpected headwind to target customer segment; domestic competitor overcapacity creating retailer stress

JLR net debt GBP 3.6B; credit rating agencies on negative watch (borders of investment grade); Q1 profit collapse (PBT -69%) increases refinancing risk if trend continues