Tata Motors Passenger Vehicles Ltd (NSE: TMPV) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Shailesh chandra — Managing Director and Chief Executive Officer
Dhiman Gupta — Chief Financial Officer
Mr. P.B. Balaji — Group Chief Financial Officer
Presentation:
operator
Welcome to Tata Motors Passenger Vehicles Limited Q3FY26 earnings call. Today we have with us Mr. Shailesh Chandra, MDN, CEO, Tata Motors Passenger Vehicles Limited Mr. P.B. balaji, CEO, Jaguar Land Rover Mr. Dhiman Gupta, CFO, Tata Motors Passenger Vehicles Limited and Mr. Richard Molyneux, CFO, Jaguar Landor and we also have our colleagues from the investor relations team. Today we plan to walk you through the results presentation followed by Q A. As a reminder, all participants will be in listen only mode and we will be taking the questions via teams platform. The same is already open to you.
To submit the questions you are requested to mention your name and the name of organization while submitting the questions. I now hand over to Mr. Diman Gupta to take over. Over to you sir.
Mr. P.B. Balaji — Group Chief Financial Officer
Thank you Nish. Safe after statement. Nothing material to report here. Our reporting segments Our reporting segments remain the same. Commercial vehicle business is out since the last quarter post the dream er. Everything else is the same. Next slide please. In terms of free business highlights for the quarter, the domestic business has had a pretty busy launch calendar over the last couple of months. Started with the launch of the Sierra which got a phenomenal response. Punch which is the leader in the subcompactic series segment received a phenomenal response in January. In between we also had the launch of the 1.5 liter diesel engine petrol engine for heavier safari in addition to the diesel and EV versions we already have.
We also crossed 1.5 lakh evies on road. That’s another milestone and a lot more exciting stuff that Sharish is going to touch upon. The later half of the presentation for Jaguar Land Rover the topmost agenda for the quarter was to normalize the production post the cyber incident, but in between a couple of exciting events which showed the resilient and strength of its brand, the Defender won the Dakar rally in its in its debut in its class. We also had very positive reviews for the first media drive into a new Jaguar on the media platform. Next slide please.
In terms of consolidated financial performance, obviously tempered by the continued impact of the cyber incident at JR where we lost almost a month of production. Consolidated revenue came in at 70,000 crore or 26% down year on year and slightly declined quarter on quarter. The JR incident offsetting some of the strong robust top line growth that we saw in India post the GHC rate cut. The EBIT margin still in the red it was 4.7 negative 4.7% for the quarter. Slight improvement quarter on quarter both at Jailer and for the domestic business. Loss before tax for the quarter before exceptional came in at 3100 crore.
Would like to call out that this excludes one this excludes exceptional provision of almost 1600 crore 800 crore at JLR. Additional impact because of the cyber incident 400 crore one time which will impact for the India business and another 400 crore solutions we’ve taken for the standard impact as a resulting for the quarter was at negative 18,000 crore largely because of adverse working capital movement and operating profits at JLR. The cumulative cash out for the quarter is about 37,000 crore and Vector Flex in the consolidated as well. Next slide please. Yeah, already spoke about the loss before tax for the quarter at 3,000 negative 3,000 crore.
The cumulative decline being 9,000 crore, almost all of it at JR. The profit before tax for the India business platform a year on year basis. Consolidated net debt for the Group stands at 39,000 crore. The India business is cash positive at 5,000 crores while JIRR it’s at 39,000 crore. Next slide please. Richard, over to you. Take through the jr. This is. Pause on this picture for a second because although it wasn’t a quarter full of highlights, this was definitely one. So as Diman said, Defender won the Dakar Rally. It’s the world’s most grueling off road endurance race and to win it and. Our first attempt shows the true class of the Defender vehicles. So we’re proud of that. We move on to the next page. The financial summary is shown here. The Cyber event cost us around 50,000 units of production and that led to a wholesale result of 59.1k in the quarter. The retails were almost 80,000. This drove revenue to 4 and a half billion pounds with average revenue per car however still rising. So average revenue was 76,000 pounds per. Car despite a weaker dollar environment. EBIT was minus 6.8% better than Q2 though this is largely the effect of inventory build down in Q2, relieving the balance sheet of some manufacturing costs and that effect reversing in Q3. I’ve already seen a couple of questions. On this, so I’ll explain a little bit more later on. I mentioned at the end of Q2 that the main cyber related cash burn would be in Q3 and it was so lower sales combined with recovering systems that allowed us to pay overdue invoices from the cyber stoppage. And we also settled and paid most supplier claims before their December year ends, which amplified our cash burn in December on a year to date basis below, including the effects of US tariffs and cyber, we were minus 2.9% EBIT and negative, just over 3 billion operating cash. As our plants are now back to operating at full pace, we’ll look to build this position back in Q4 to.
End the year within our guidance level. Next chart. As per usual, I won’t cover this. I’ll cover all the points in it during my comments and this is for your reference. Next chart. Wholesales by brand is shown here. All impacted by cyber, but the relative performance is largely driven by the ramp up Sequence of our plants, with Nitra, the home of the Defender being the first that wrapped up and Hailwood and the Velar lines starting last. Hence Defender wholesales were actually up on Q2, whereas Range Rover was down on a full year basis. Range Rover as a brand was down 25%, although that’s led by the Evoque which was down 41%. Defender is down less and you can see the effect of our run out of legacy Jaguar production as we turn full attention to the pre production testing.
Of the upcoming amazing cars. Next chart. From a regional perspective, I referenced in Q2 that the long lead markets, especially overseas and China had been protected from the immediate effect of cyber as they already had cars on the water. It was the UK and Europe that took the brunt of the hit in Q2 and therefore in Q3 this naturally normalized with Europe and the UK both rising quarter on quarter whilst China and overseas suffered from the hole in their inbound shipments. So it’s best to look at the year to date numbers where the UK and overseas have outperformed the US and China on a relative basis.
This reflects the pressures of tariffs in the US and industry overcapacity, retailer margins and luxury pushback in China. These are the two biggest car markets in the world, so when they both suffer Simultaneously, the OEM’s world gets very difficult. Next chart. Walking from the same quarter last year when we made a profit before tax of 523 million. So volume is the biggest element. 45,000 fewer units sold at 59,000 versus 104,000 last year. Duties continue to be year over year negative cumulatively now with 410 million pounds adverse in the first nine months of the year and this is only partially offset year to date by emissions in the third bar. VME continues to grow as we try and secure order intake and retails in a very competitive environment. Retail incurred rates were 7.7% in Q3 versus 4.2% last year with the biggest deterioration being in China.
Whilst we continue to make some progress on material costs, we had two significant warranty bookings for campaigns and buybacks that drove warranty higher. As you can see here. In structural costs I mentioned the PL effect of restocking and finally dollar weakness continued in the quarter and it combined with an upward RE rating of key raw materials. Though hedges offer short term protection to these trends, if they turn structural then that’s another challenge for us to face. Next chart. Walking from EBIT through to cash. We delivered 166 million pound cash profit after tax investment spending rose versus an artificially low Q2 number as we paid invoices that were stuck through the cyber incident and made accelerated capital payments to a series of suppliers ahead of their financial year ends. Working capital was significantly negative from the inventory buildup and the lower volume quarter cumulative year to date, working capital is circa one and a quarter billion pounds negative, although a proportion of that will reverse in Q4. Next chart. I mentioned investment earlier and we’re still in a heavy investment spend period as we build up to multiple product launches over the next 24 months. Engineering capitalization ratio at 60% is lower than recent quarters and that’s due to the effect of cyber, meaning engineers were not able to progress work on vehicle programs that have passed their capitalization hurdles. This will grow back from Q4. Capital I’ve already referenced was above trend levels in the quarter, but will also revert back to normal in Q4. Next chart. So to the business update again. Next Char Looking forward, we have to face reality. The environment in which we are operating has changed rapidly and almost universally in an adverse direction. We recognize this will require us to adjust our business model and we’ll share much more on this in our Investor Day in June. In terms of the main issues, the first nine months of our financial year saw us pay an additional £410 million in tariffs and a bout of dollar weakness reduced the sterling value of the remaining dollar revenues. In the same months we paid 375 million pounds more on sales allowances to drive order intake and retails.
Emissions regulations outside the US keep biting harder and harder year after year and the UK government, restricted on the spend side, are significantly increasing the tax burden. And finally in China we’ve seen a 26% reduction in volume year over year, more of which on the next chart combined. This picture is not a very constructive business environment for JLR to operate in. Next page. For China specifically, here’s a little bit more background on a market which is it’s highly dynamic and has spillover effects on almost all global markets other than the us. It’s the biggest car market in the world and the premium end is shrinking as you can see down 21% year over year with luxury taxes hitting the very top end and domestic new energy vehicles attacking the bottom. A slowing market and rapid capacity build out has also led to a supply demand imbalance in the market that is driving thousands of retailers into insolvency. You can see 5,000 there last year alone.
This is not a short term boom bust cycle. This is structural and Permanent in China. And JLR has until very recently weathered a storm well with volume reductions lower than the market. But in recent months we’ve suffered more severely. Our plan is simple. Manage retailer inventory to protect sales quality, drive demand through brand development and leverage the run out of our locally produced cars to focus purely on profitable imported models. With our JV leveraging Freelander in the more mainstream market segments. Sort of the final chart, next chart. Thank you. For the balance of the year, we’ve got 53 days to go and whilst it’s true that I can see more risks than opportunity, as of today we are reconfirming our guidance of greater than 0% EBIT and free cash flow in the range of negative 2.2 to negative 2.5 billion. We’ll give you an update on FY27 and beyond at a later date. And that’s another really good reason to attend our investor day that’s going to be held in mid June. For now, that’s all from me. I’ll hand you back to Diman and Balaji.
Dhiman Gupta — Chief Financial Officer
Thank you very much for your time. Yeah. For coming on to the domestic business. I think the first half of the year was a challenging time when we had seen a demand slowdown, especially in the less than 4 meter segment and our market share had reflected that by showing a drop over 525 as that’s the segment where we had the maximum exposure to the fourth GSP cards. We’ve seen a continuous strong rebound in our market share which has improved about 1 1/2% from Q1 FY25. We are mostly the best positioned from a cafe mix perspective with a very balanced exposure towards petrol. Diesel evaluation in EVNCNG continues to improve and in year to date at 5:26, the penetration of EVNC used to that 43%.
Next slide please. In terms of the electric vehicle business, very strong year on year, about 50% with volumes moving on from 16,000 per quarter to 24,000. You know, there was slight concern on the sustainability of EV demand because the GST data make the TCOs adverse. But the signs are demand still remains stable. Our strategy of having EV at various price points plus all the value enhancements we are doing as well as the lifetime warranty has played out very well in the last couple of months and we’ve seen almost a 10% market share gain since Q1 FY26.
Next slide please. In terms of financial performance, 24% top line growth. This was on the back of the record for big volumes of 170,000 that we had in Q3 FY26 demand continues to be very strong and we looking for an even more positive end to the year. I think Shadish is going to kind of come ahead on EBITDA margin and EBIT margin for the quarter stood at 7% and 1.2% respectively about a 1% gain on a quarter on quarter basis. Profit before tax to get 300 crore flat on a year on year basis. As I mentioned our PBT year on year was flat about 300 crore.
We saw significant gains coming through from volume and volume and mix on back of the rising demand. We also had about 178 crore of increase coming in from incentives. Our incentives for the quarter stood at 361 crore and accruals for the year was was stood at 573 crores. The accruals for PLI. I mean I guess the obvious question is you know what would be the steady state quarterly rate of pli. But that’s difficult to comment because the accruals end up being a little volatile depending on when we receive new sentence and the certifications for our products.
The the gains that we had on PLI and volumes were partially offset by adverse realizations year on year. The high fixed marketing expenses that we had to sustain for a very busy launch calendar. The DNA year on year was also about 120 crores higher largely because we hit the sops of Sierra Pungency and and Harris Safari Petrol Engine in November December itself so that we are ready for supplies in January. But the Fortune quarter impact next quarter will be much lower. Moving on to the next slide.
Mr. P.B. Balaji — Group Chief Financial Officer
Thank you Dimon. So starting with the industry in quarter three the PV industry saw the highest ever offtake of nearly 13 lakh. This was on the back of festive period and GST tailwinds. The industry has been growing at a strong double digit pace post the GST 2.0 and it has been around 20% growth year on year in quarter three. Also you know because retails were significantly higher than offtakes in quarter three. Channel inventory reduction has also been significant across OEMs and roughly 10 to 15% days of reduction one would have seen in quarter three. Also post GST 2.0 there has been secular growth across segments.
Almost all vehicle segment and surf segments have grown double digit. In particular few segments have grown sharply which include the compact SUV, subcompact SUV, mid SUV and a few more coming to EVS. The EV industry has been growing sharply in FY26 and the growth was sustained in quarter three with 76% growth year on year and this growth has been a result of new launches and a general positivity on EVs talking about the high, you know Tata Motors performance, we recorded our best ever quarterly performance with wholesale of 171,000 and retails crossing for the first time 2 lakh mark, a growth of over 22% compared to quarter three of the previous year.
The momentum sustained in January 26 where we achieved all time high monthly sales of 71,000 units reflecting a 47% year on year increase. As per Wahan data we rose to the number two position in the Indian market with a 13.8% market share which is which was an improvement of 100bps versus quarter two of this financial year. In EVs also we achieved our highest ever retails in quarter three driven by over 10,000 retails in the month of December. We also saw an improvement in our market shares in EVs with an exit market share of about 46% in December.
Among our products, Nexon saw very strong demand of over 63,000 in Q3, emerging as the highest selling model in India. Punch also featured among the top three SUVs with strong demand momentum post GST next slide. Over the past few months we have had several critical launches that will be key growth drivers for the business in quarter four and beyond. The highly anticipated Sierra launched to a very positive response. It secured 70,000 bookings on the first day and continues to see strong booking momentum as we ramp up production for Sierra over the coming months we will be able to serve this demand pipeline and this will be a key code driver for us.
The launch of Punch facelift will strengthen traction for what has already been a very popular product with the fresher aesthetics and enhanced competitiveness. Punch already recorded its highest ever volumes in January 26th backed by Rome. Robust customer demand Introduction of petrol variants for Harris Safari has widened our reach in the segment enabling us to cater to a broader set of customers. We are seeing strong initial response for the petrol variants in the key markets. We also re enter the fleet segment with petrol and CNG versions of Express which will help us tap into the growing fleet segment the key focus areas.
Going forward we are optimistic that industry will continue to witness sustained positive demand trends. Entire Motors PV is well positioned to maintain its growth momentum supported by a healthy order book for current models, disciplined inventory levels and incremental volume from recent introductions. In terms of EVs, growth will be sustained on the back of a reinforced portfolio and focused efforts on Mainstreaming including the charging infra. We will scale up production for Sierra to meet the strong customer demand and from a profitability perspective we will improve profitability through operating leverage from higher volumes, richer product mix on the back of Sierra Harrier safari interventions and sustained structural cost optimization to offset commodity headwinds and enhance contribution.
So back to you.
Dhiman Gupta — Chief Financial Officer
Moving on to the free cash flows for the domestic business ESCF came even at about 300 crore. The cash the cash pocket of tax resignation trend was was adverse by about 200 crore but there was positive working capital changes in the quarter on the back of high demand leading to excess of 300 crore. Our total investment spending year to date is about 3,800 crore running at about a steady state and total capex in this capex investments here to date has been about 3,100 crore. We expect to end some end the year somewhere around 4,200 to 4,300 crore for the full year.
Moving on to the outlook for the business of the group. Obviously it’s been a very challenging last couple of quarters for the group on the back of the you know US tariff in in Q1 followed by the cyber incident. H1 was also pretty weak for the domestic business when there was a demand slowdown. However you know the you know we plan to end the year on a strong footing with the JLR production normalizing a very strong demand recovery in India. And you know the JDR brand remains strong and resilient which is very critical as it navigates all the geopolitical uncertainties as well as executes its enterprise missions in India.
The refresh portfolio and the new name page that we’ve introduced on the back of a very strong demand recovery places us very well to leverage the demand fully as well as we are going to accelerate our structural cost reduction programs that shadesh mentioned to improve on our profitability. Thank you. Also like to mention that we have our analyst day invested in sometime in June 2026 and just wanted to give that heads up so that you keep a lookout for the dates that we will separately integrate you. Moving on to the Q and A session, Couple of questions already lined up Richard.
The first set of questions coming your way. First one is, you know where is the breakeven SCF for JR in terms of wholesales per year? I believe it used to be around 325,000 units per year. Is that the case? How is your order book at the end of Q3 VMEs have significantly increased year to date reaching 7.7% where and when do you see them reaching peak levels?
Questions and Answers:
operator
Okay, so let me go through that set of questions. So it’s fair to say that this year our cash breakeven is significantly above 325,000 units. But that’s a metric that’s best use prospectively to judge how well the business is performing rather than retrospectively. Prospectively. We’ll give you a proper update on FY27 and the years beyond in our investor day in June. So probably further conversation of that. Until then, our order bank is in a decent place at the end of Q3 and is higher than it was at the end of September. So we are building order intake relatively strongly.
And I think, I mean, the power of our brands is our biggest advantage. And I did mention the Dakar win early on, but we’re already seeing a direct influence of that on the order intake, on defenders. So defend your order intake is now around 10,000 units a month from the global press coverage and brand enhancement that things like Dakar have. So we will focus on continuing to grow our brand and use that to pull through some of the problems that we face. We will keep needing to spend money on vme. That’s the third part of this question here.
It did reach 7.7% in Q3. I expect it may go up marginally in the next six months. But after that point in time when we’ve run through the Jaguars and we’re starting to think through launching new vehicles, I would expect that to cap and start to come down. So the peak level, relatively close to that 7.7. And in terms of your fourth part of your question in the bond market, look, we’re assessing it. I don’t have anything to announce at this stage, but we’re definitely looking at it.
Dhiman Gupta
Okay, Richard, you know, can we take up the second question also from Kapil Jada Cross? Martins, can you please explain the sharp improvement? Important quarter even ivme, what is the outlook on account of commodities and semiconductor prices?
operator
Okay, so look, gross margins. The. The explanation is simple and complex at the same time. Whenever you build down inventory, you take manufacturing cost out of your balance sheet and charge it through the P L. Whenever you build up in inventory, the reverse happens. So in Q2, we destocked massively because we weren’t producing any cars. So that meant that the P and L took a charge from the balance sheet for fixed manufacturing and other overheads in Q3 that reversed. That’s the main cause of the difference in gross margin. It’s simply a timing effect and the stocking cycle you can see the flip side of that in our working capital numbers because our working capital grew rapidly in Q3.
Dhiman Gupta
Just just a pull couple. Also, they do take a look at the EBIT bridge that Richard has called out. It actually teases out the various line items in greater detail. What’s it on mix? What’s it on emissions? What’s it on warranty? What’s it on the labor and overheads that Richard just referred to? I think that will give you a good color on how the flow is happening and beyond able to also have the impact of the currency as well. So I think as you understand that she better I think it’ll give you all the answers that you’re looking for.
Next set of questions from Ginesh Richard Setting it your way how do you see increasing competition from local brands in the Lakshika segment? Jailer debt has increased substantially due to operational disruptions. Do you expect to go back to net cash position in the next two quarters? How has tariff translation strategy evolved considering demand, environment and production disruption? I think BME you kind of already explained so you can skip that. Given the transitionary and structural challenges, is there a case to revisit your CAPEX guidance? HCF guidance implies 4Q FCF was 0.5 to 0.8 billion. Does it employ that 4Q production wouldn’t have fully normalized.
operator
Right. So we get out subsection F. Okay, I’ll start at the top. Well, in China there is definitely a squeeze on the luxury segment and that is a squeeze from below in terms of the local new energy vehicles, but also a squeeze from above in terms of a general move away from luxury by the Chinese authorities, which is evidenced partly by their increase in luxury car tax threshold on in July where they basically levied an extra 10% duty on all cars with a transaction price between 900,000 RMB and 1.3 million. So there is a bit of a squeeze going on and you can see that in all OEMS data in relation to China.
We are going to make sure, as I referenced earlier, we do not overstock that market and that we rely on the power of our brands to pull through sales. Accepting that in the short term that is going to mean that we hurt a bit in China but we will protect that market for its long term abilities to grow. Our debt has increased. It will certainly not get back to net cash over the next two or three quarters. That is going to be something that takes a little bit more time. You can see from the fact that we started the year with £250 million roughly of net cash we will lose in our guidance between 2.2 and 2.5 and additionally paid a dividend of circa £450 million during the year.
So you can work from that where we will end up this year and then as I said beforehand, we’ll give you guidance on 27 and beyond in our investment day. But it is not something that is going to disappear over the next two to three quarters. It is more embedded than that tariff transmission strategy. It’s a good question, but one that’s really difficult to answer. So we did increase our prices in the US and we increased things like delivery charges and various other mechanisms to try and recover some of the duties market forces then overtake.
And what you find is we are probably compensating a fair amount of that now in terms of increased BME as all manufacturers globally suffering in China and some other markets. Look at those markets which are still robust and try and push sales. So it’s a really good question. It’s not quite so easy to answer in terms of how much of our price increases from the tariff changes have actually stuck and how much have been compensated by other market forces. Next one D. Yes, it was partly due to the Jaguar phase out. So the only vehicles in Jaguar that we’re currently producing, and that’s only for another few weeks, is the F pace where we are building some stock for the US market.
Other than that, we are literally in the out of all old Jaguars. I’ve mentioned VME before. Capex guidance I think will be 3.6, 3.7 for what I can see today. And your point around F is correct. The 0.5 to 0.8 billion positive is where we are heading and what we need in order to meet the numbers that we have committed to. And Q4 production has normalized. So we, you know, the majority of our business is focused on Range Rover, Range Rover, Sport and Defender. Those vehicles, the first two are produced in Solihull, the last one is produced in Nitra.
All of those plants are now back fully running at capacity and there are no residual cyber issues in those two plants. So yes, Q4 will return to normal. I mentioned beforehand that we took exceptional charges related to cyber in Q2 and Q3. We will not do so in Q4.
Mr. P.B. Balaji
Q4 will be normal. Thanks, Richard.
Dhiman Gupta
Moving on to the next set of questions on JDR, how do you see CY26 outlook for North America, Europe, UK and China? Can you indicate launch timelines for RR? Can you indicate Q3 production of factory inventory and is the production going to be around 110,000 on I think some commentary around incentives in the US.
operator
So I’ve tried to cover demand generally. China is definitely the most challenging market at the moment. The rest of them are okay, but not a lot better than okay, I think I would say. Where’s that question disappeared to? Sorry. If you could keep it up on screen that would really help me.
operator
Thanks. Just a minute. Okay, well, tell you what, let me. Now we go into product launches. No, here we go. I’ll wait. I’m technically glitcher. Just hold on. That’s all right. I’m trying to see if I can find any questions for Sh and Dima.
Mr. P.B. Balaji
One of the. Okay, maybe I’ll take the next question. Yeah, go for. The next question. Coming your way. For India, how much was the commodity intact expectation for Q4? What was the blended price in January? Can you indicate the blended discounts for retail in 23? What is the current outstanding for Sierra and what would be the current capacity? Will March capacity be at 15,000 units?
operator
There are multiple questions. Can you just, just go one by one, please? First question, how much was the commodity impact expectation for Q4? So we can’t give guidance of what the commodity Expectation was for Q4, but generally we have been seeing, even in the last few quarters it has been about 1.7 to 2% of our revenue. We are still assessing what is going to happen back in Q4. What was the next question? What was the blended price hike ticketing January? We haven’t taken any price hike in January. We are yet to take. But in February we are going to take the exact percentage increase. We are going to announce, you know, whenever we take it. Can you indicate blended discounts for vehicle in Q3? Blended discount would be, you know, somewhere around three and a half to 4% of our revenue.
Dhiman Gupta
That also, that’s not all consumer discount. It also includes the unsented student dealers.
operator
Yes. Yeah. What is the current outstanding booking for Sierra? What would be the current capacity and will we be increasing the capacity to 15,000 units a month by March?
Dhiman Gupta
Yes. We can’t share with you the current status of the bookings, but I can clearly tell you that 70,000 is what we had announced on the 16th of December. It’s of course six digits in six digits as far as the capacity is concerned and ramp up. I think in Jan we were able to supply about 7,000 units and the deliveries started only from 16 January. So we are clearly in a ramp up phase. And the first even Before I talk about in house ramp up the first level problem is you know this, you know on the supply ramp up from the suppliers itself and also there’s, there’s a clear signal that one is seeing that industry volumes have also increased from 350,000 to nearly 420, 420,000amonth in the last three, four months we have been seeing and therefore at tier one to tier three supplier level especially let’s say for example castings and all we are seeing that there is general capacity constraint that is coming.
So we are working on enhancing the capacities and ramping up the supplies from the suppliers in house capacity ramp up is happening to the extent of capacity which has been dedicated to Sierra in our San and 2 factory. But we are also increasing the capacity further in two phases in the next five to six months and therefore the waiting period which today would be say around six to seven months should progressively come down as we ramp up and further ramp up with the enhanced capacity in the next four, five to six months. So that’s broadly the commentary on the status of Sierra pickings and capacity ramp.
Up.
Mr. P.B. Balaji
And move on to the next question that’s from Kapil. How much PLI was accounted in the quarter and what was the percentage of the portfolio getting PLI currently? So I think put that in the IR tech. The total PLI for the quarter two was about 361 crore and 573 crores for year to date in the first nine months. And about 40 45% of our revenues in are eligible for PLI incentives and that’s what we are approving and that should go up even more when we move to Mar. I’ll direct the next question to you as well.
I think current booking numbers I think already answered the question on bookings and capacity for Sierra. The next question is on you know how to look at guidance for demand on carrier and safari volumes post the 1.5 liter petrol launch. How are we thinking on curve volumes post the Sierra launch And how do you see growth outlook for domestic industry and Tata Motors for next quarter and FY27 how does the product pipeline post Sierra look like?
operator
Okay, the first question was on. First question goes on. How do you think of the demand?
Dhiman Gupta
Yeah yes Harrier, I think petrol is going to the indications basis. The bookings that we have which has been flowing is about 30 to 30 to 35% of our volume should come from petrol. Right now we are again on the ramp up phase because as I said that there is common engine sharing between Sierra and Safari. So we are distributing in a balanced way the engine supply. So again, it’s more of capacity side issue which I think we’ll be able to overcome in the coming months. So strong bookings, extremely strong, strong bookings we are getting for Harrier.
And what we are realizing that these customers were, were only looking for petrol. There is no overlap with diesel or electric is what we see as far as Curve is concerned. You know, there are certain interventions that we are taking on the product and we are particularly seeing, you know, December onwards we saw that there has been uptick in the demand for this 15 to 20 lakh segment of EVs in which curve EV falls and we have seen a significant spurt of demand there. And I would say that Curve is a car where it’s a unique design, first time being seen in India and therefore it’s going to take time, just like we had seen for Nexon.
When you bring a new design, it takes time to design to be assimilated and accepted in the market. So we are quite optimistic about, you know, going forward progressively increasing in volumes. What was next question, Diman?
operator
So the next question was, how do we, how are we looking at demand? Yes. And quarter four. Yeah.
Dhiman Gupta
So, you know, the first month of quarter four was about 14 growth for the industry. We were at about 46%. We, we clearly see that the growth of the industry in quarter four will be around 13 to 14%. Kind of a zone. We should be 40%, roughly that kind of a growth rate. So we, we expect that for FY26, therefore the industry would grow by about 8 to 9%. Rough guesstimate, I would say. Whereas for us we should be somewhere in mid teens. So it would be a double digit industry meeting growth for us. Okay.
operator
And if you could take the last question, Shailesh, how does the product pipeline look post CRM?
Dhiman Gupta
Yeah. So I think this is something which you got to wait for. There are clear nameplates, three nameplates that we have talked about in the next four to five years. But beyond Sierra, we are also going to get a lot of, you know, refreshes, model year interventions and also the mid cycle enhancements for the current portfolio also. And of course there are EVs which are going to come, the Sponge EV which is going to come very soon. You’ll have Sierra EV which is going to get launched and as I said, mid cycle enhancements and new launches which we’ll talk about later on.
operator
Okay, one last question before I move back to Richard. How do we assess EU Trade deals implication for the India auto sector, that is does it potentially cap Tata Motors Premieration trajectory in the UV segment? And conversely, are we revisiting localization strategies for the JLR portfolio?
Dhiman Gupta
Okay, so first part I’ll answer. You know, we have very less details about the European trade deal, but basis whatever we are reading and whatever information we have, we clearly see that it’s not going to impact in any big way as far as our strategy and journey of premiumization is concerned. Any player who has to compete effectively in India will have to localize with whatever we are reading in terms of the duty rates which will still remain. So there’s no impact immediately for sure. But over a period of time also not localizing in India will have a difficult, you know, difficult strategy from a strategy perspective for any player, you know, by just exporting it will be very difficult.
But yes, it does give, you know, some flexibility for, you know, the players from Europe to experiment with few models in India before they commit to investments. Here is what we would say building.
Mr. P.B. Balaji
On Shiresh’s point as far as JLR localization strategy is concerned. If you know, if you recollect, we already have localized Range Rover and Range Over Sport here in India in terms of CKD manufacturing. That strategy obviously from a commercial perspective, whatever makes sense is what we will do. So we’ll continue to see how the thing evolves before the EU dealers. Anyway, there’s only the UK deal. That’s what the first one. That’s privacy for us which we need to see how best we can leverage it to the best of our ability. So very much work in progress on that front and we’ll talk more about it in the investor day.
Yeah, I think. Moving on to the next question, I’ll go back to Richard. Richard, any insight on product launches along with rough timelines in FY27 for JLR especially Range Rover EV and Jaguar ramp up regard.
operator
Yeah, of course.
Dhiman Gupta
So look, plans are always adjusting but as of now we’re going to launch the Range Rover Electric this year and start delivering to customers and we’ll also unveil the new production Jaguar car this year and finally also unveil the first car off our EMA platform that’s a unique new model from the Range Rover family that’s going to get built at Hailwood. So we are approaching a really, really busy launch period for for JLR over the next couple of years. Again, we’ll give you more details on. Timings etc at the investor day.
Dhiman Gupta
Yes. Moving on to the next question from Binet I think some of these questions have already been taken up by Richard. Yeah, next quarter is going to be a normal quarter for jlr. I think on pli. Incentives accrued for the quarter and year to date have also been answered. I think a few questions from Binet and I think Gunjan on ED margins. I think the EV margins, you know, move up and down depending on the rate at which PLI is being accrued and it’s not a normal rate. So I’ll kind of request you to reach out to the IR team and we can take you through the details.
Yeah Richard, next question. I think you’ve partly answered but if you could take this up on can you cover how we should think about VME and warranty costs which have continued to go up?
Mr. P.B. Balaji
Yes. So VME I think is a is an industry trend at the moment. As I’ve mentioned there are the China market is shrinking for many OEMs and that is increasing pressure in other markets for all OEMs to try and access the sales. So I mentioned beforehand I do think it is peaking but it may have a little bit further to go over the six months. So. So nothing more to say other than that at this point.
operator
Okay, next question from Nishit Power. The dealer inventory levels across markets are they much below normal given that we’ve not been able to supply. Next question. I think VME questions you’ve all three answered a couple of times. Warranty expenses remained high at 7.7% of sales. Any quarterly related one offs there and how could you sustain it in the next one or two years? And the last question, how should one look at sustainable EBIT margin levels between FY27 and 28?
Dhiman Gupta
Okay, so I’ll try and cover those. Dealer inventory levels certainly in some markets such as the US are fairly low at the moment. I I was in the US earlier this year and there are large numbers of dealers who normally would have vehicles all over their front lots where it was fairly empty. So dealer inventory in the US is tight. We are filling it now but it has been fairly tight as we work to basically refill our supply chain following cyber. That is temporary and it will relieve itself during Q4. There was a question I can remember on warranty and yes, there were one offs in this quarter to the tune of circa £100 million related to one offs in campaigns and buyback provisions in the USA.
So we are not running at a normalized rate of 7.7%. It is a lot lower than that and we intend these one offs to Stop as quickly as we can.
operator
Moving on to the next question, I think from Rakesh, I think first half of the question you’ve kind of already taken. Moving on to the next part. Can you please update on Freelander rollout plan? It appears it is going to be sold outside China as well and which all markets and the royalty income arrangement.
Shailesh chandra
Okay. So Freelander is also going to start production. I think this year. It will be initially for China only. But when we announced Freelander we did say it would be available for global rollout over time and that I think is still the case. It will be managed by our joint venture in China between ourselves and Cherry. And look, obviously there is a royalty arrangement within that. I am absolutely not going to comment on what that is. However, we are very much expecting that vehicle to be or that vehicle and vehicles because it won’t end up as being just one.
So to be a big success.
operator
Okay, thanks Richard. The next question also your way ebit margin guidance was 5 to 7% before the cyber attack. What would the range be possible ahead? Our key models, Range Rover, Range Rover, Sport and Defender are in niche premium categories. Is competitive intensity from Chinese OEMs high in these categories in North America, Europe and China. And media reports indicate Cherry Automobile is an early stage negotiations to use JLR production capacities in UK and any comment on that?
Dhiman Gupta
The second one, we don’t comment on speculative reports so wouldn’t want to comment on that. The first one, I give it back to you. Yeah, yeah, so absolutely right on that. So EBIT margin 5.5 to 7% before the cyber attack. Always difficult to say. I would suspect we would have been close to the bottom end of that range before cyber. The fact that foreign exchange, a little bit of vme, etcetera have moved adverse to us quite significantly over that period means I think we would have been around the bottom end of that in relation to Range Rover, Range Rover, Sport and defender. Chinese OEMs are coming and they’re coming globally. So far outside of China, there hasn’t been that much of an impact in terms of the segments of the markets in which we operate because the one thing that Chinese OEMs do not have is brands.
And brands is where we are focusing our unique selling point along with the capabilities of the vehicles which sort of emphasize those perhaps. So there’s two choices. Either the world goes completely protectionist, in which case they’re protected from Chinese cars but with considerable disadvantages, or it goes free trade. JLR prefers a free trade model. It is a better model for JLR and we welcome competition. It will force us to be better. So are we concerned? Yes. Are we paying close attention?
operator
Yes. Are we frightened? No.
Shailesh chandra
Okay. Shelley Shah, next question from Kapil your way we mentioned that margins will improve from Q4 FY26 led by Sierra launch and price hike in January 26th. How much price hike have we taken? Can you please give an update if we are on track to improve margins in light of commodity pressure.
Mr. P.B. Balaji
So you know as I said in one of the earlier replies that we are going to take price increase this month and we will be able to tell you the extent of price increase whenever we take it. Sierra of course has enhanced our, you know, margin also the VME which was very high in earlier quarters has come down. So you can clearly while the commodity price pressure remains. But as a result of all these actions and the tailwinds that we have in quarter four with very low inventories and all, you know at the start of quarter four so you can definitely expect much better margin as compared to what you had seen in quarter three in quarter four.
operator
Thank you. And Shalish, I’ll hand it back over to you to take the last question for the day from Kapil. Is there a big change in first time buyers for Tata Motors for the industry after GST cut? Which segment of cars are first time buyers going for more?
Shailesh chandra
I. I cannot give you offhand what has been the increase in first time buyers. But yes there is a Delta increase that we have seen in first time buyers. Maybe separately we can ask the investor innovation team to give that information to you. But the segments which have really responded well post GST 2.2 I also mentioned it seems is the subcompact SUV and the compact SUV segment which has seen growth much higher than the average growth that we have seen of 20% in this segment. Maybe these two segments would be more upwards of 30% or maybe 25, 26% or so.
So these are the two segments which I’ll say in the less than 4 meter category which has seen significant traction. OCSC 2.0 I think mid size SUV segment also has seen a growth better than the average growth of the industry. But that is also to do with the new launches. So it’s a combined effect of new launches as well as general production in GST rate.
operator
Thank you. Thank you Shanish. And that brings us to the end of the Q3 FY26 call. See you on the call next quarter. And in between you should hear from.
Dhiman Gupta
Us informing you about the results of.
Shailesh chandra
The Investor Day in June. Thank you and have a good evening.