Tata Motors shares gained momentum on Monday, breaking a five-day losing streak as investors gear up for the company's upcoming demerger. The stock climbed nearly 1% to Rs 686.20, reflecting renewed interest ahead of the October 14 record date for the separation of its passenger and commercial vehicle businesses.

Demerger Details

The Composite Scheme of Arrangement, which became effective from October 1, creates two independent entities:

1. Tata Motors Passenger Vehicles (TMPV): Encompassing PV, EV, and JLR businesses
2. TML Commercial Vehicles (TMLCV): Focusing on domestic CV operations

Shareholders will receive shares in both companies at a 1:1 ratio, with the record date set for October 14.

Key Points of the Demerger

Market Implications

The demerger is expected to have significant implications for Tata Motors' stock:

• Price Adjustment: On the record date, TML's share price will be adjusted to reflect the demerger of the commercial vehicles business through a price discovery mechanism on the stock exchanges.
• Temporary Trading Suspension: TMLCV shares will not be available for trading on stock exchanges from the date of allotment until they are listed, a process that typically takes 45-60 days.
• Unlocking Value: YES Securities anticipates that the split will unlock value by creating pure-play verticals, potentially benefiting shareholders in the long run.
• Increased Volatility: Analysts warn of potential increased volatility around the ex-date as the market adjusts to the new corporate structure.

Recent Challenges

The demerger comes at a time when Jaguar Land Rover, a key component of Tata Motors' passenger vehicle business, is gradually restarting production following a cyberattack in September. This incident resulted in:

• A 24% drop in wholesale volumes
• Estimated losses of £50 million per week

Technical Outlook

Despite the recent uptick, Tata Motors' stock remains below most key moving averages, with resistance noted at Rs 720. This technical positioning suggests that while the demerger news has provided some positive momentum, the stock may still face challenges in the near term.

Investors and market participants will be closely watching how the demerger unfolds and its impact on the valuation of both entities in the coming weeks. The success of this corporate action could set a precedent for other conglomerates considering similar restructuring moves in the Indian market.

Tata Motors Passenger Vehicles Limited (formerly Tata Motors Limited) has reported significant operational challenges at its wholly-owned subsidiary Jaguar Land Rover (JLR) for the third quarter of FY26. The luxury automotive manufacturer continues to grapple with the aftermath of a cyber incident that severely impacted production and sales volumes.

Q3 FY26 Performance Hit by Cyber Disruption

JLR's Q3 FY26 performance reflects the substantial impact of the cyber incident that occurred earlier in the financial year. The company's sales figures demonstrate the severity of the disruption across both wholesale and retail channels.

*Calculated figures based on reported percentage changes

Production Recovery Timeline and Global Impact

Production at JLR facilities returned to normal levels only by mid-November following the cyber incident. The extended recovery period significantly affected the company's ability to distribute vehicles globally, creating a cascading impact on quarterly performance. All major markets experienced substantial declines in wholesale volumes during Q3 FY26.

Product Mix and Legacy Model Transition

Despite the overall volume decline, JLR maintained a strong focus on its premium model portfolio. The Range Rover, Range Rover Sport, and Defender models represented 74.30% of total wholesale volumes in Q3 FY26, an increase from 70.30% in Q3 FY25, though down from 76.70% in the previous quarter.

The planned wind-down of legacy Jaguar models ahead of the new Jaguar launch continued to impact volumes throughout the quarter, as expected by the company. This strategic transition, combined with incremental US tariffs affecting JLR's US exports, contributed to the overall volume decline.

Corporate Structure and Future Outlook

The results were announced by Tata Motors Passenger Vehicles Limited, reflecting the completed demerger that separated the passenger vehicle business from the commercial vehicle operations. JLR remains a wholly-owned subsidiary of this new entity, which is part of the broader Tata Sons group.

JLR has indicated that it will report its full financial results for Q3 FY26 in February 2026, which will provide additional insights into the financial impact of the operational disruptions. The company continues to focus on its electrification strategy and sustainability goals as part of its Reimagine transformation plan.