Shares of Tata Motors were lower by over 3 percent in early trade on September 25, emerging as the top Nifty 50 and F&O loser after a report by the Financial Times said that subsidiary JLR may face a Euro 2 billion hit as it was not insured against a recent cyberattack that disrupted operations.
The Financial Times report indicated that the hit on JLR could be higher than its entire profit of the previous fiscal. News agency Reuters quoted The Insurer, which cited cyber insurance market sources that the JLR had failed to finalise a cyber insurance deal - brokered by Lockton - leaving it likely uninsured for the attack. JLR has not yet commented on the reports.
JLR UK Closure
Jaguar Land Rover is extending factory closure until October 1 following a cyberattack in late August. "We are working at pace to resolve global IT issues impacting our business. We will provide an update as appropriate in due course," Tata Motors had said on September 1.
"We have made this decision to give clarity for the coming week as we build the timeline for the phased restart of our operations and continue our investigation," JLR said on September 23.
JLR has three factories in Britain, at Solihull, Halewood and Wolverhampton, which together manufacture about 1,000 cars per day. The company is losing £50 million ($68 million) every week, as per some news reports.
Why JLR Matters
During FY25, Jaguar Land Rover contributed 72 percent to Tata Motors' total automotive revenue, higher than its contributing in FY24, reflecting a higher growth trajectory of Jaguar Land Rover as compared to the Tata vehicles. Jaguar Land Rover's revenue increased in FY25 on account of better performance in North America markets. The employee costs at Jaguar Land Rover rose by 15.6 percent to Rs 36,887 crore (£3,417 million) in FY25 due to rise in headcount and annual increments.
Cyberattack Fallout
The situation has led to British business minister Peter Kyle and industry minister Chris McDonald visit JLR earlier this week to speak to the CEO about the impact. As of June, more than four in ten businesses in UK have had some form of cyber breach over the past one year, according to data cited by Reuters.
“I fully recognise the anxiety and deep concern that employees at Jaguar Land Rover and across the supply chain will be feeling. The government and the National Cyber Security Centre will do everything in our power to help resolve this as soon as possible,” UK's Business and Trade minister Chris Bryant told the House of Commons last week.
According to PTI News, a group calling itself 'Scattered Lapsus$ Hunters' is believed to have claimed responsibility for the hack.
Setback for Tata Motors
The cyberattack has led to disruptions at a time when Tata Motors has been seeing increased festive demand in India following the GST rate cuts. Tata Motors said it recorded 10,000 car deliveries and over 25,000 enquiries on the first day of Navaratri, marking a strong start to the festive season.
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