Tata Motors Q1FY26 net profit drops 63% Y-O-Y

Consolidated revenue slipped 2.5% to ₹104,407 crore, while EBIT fell to ₹4,500 crore from ₹8,600 crore a year earlier, with margins contracting 370 basis points to 4.3%.

Profit before tax (before exceptional items) came in at ₹5,617 crore, supported by a sharp fall in finance costs to ₹938 crore from ₹1,471 crore.

Free cash flow for the automotive segment was negative ₹12,300 crore, hit by adverse working capital movements from seasonality and tariffs, taking net automotive debt to ₹13,500 crore.

JLR hit by tariffs, maintains guidance

JLR’s quarterly revenue dropped 9.2% to £6.6 billion, with EBIT margin sliding to 4.0% from 8.9%.

PBT fell 49.4% to £351 million, with free cash flow at negative £758 million.

The decline was driven by the 27.5% US tariff on UK- and EU-produced vehicles and the planned wind-down of legacy Jaguar models.

The company welcomed the UK-US trade deal, effective June 30, 2025, cutting tariffs on UK-made vehicles exported to the US to 10%, and the July 27 EU-US deal, which will reduce tariffs on EU-produced vehicles to 15%.

JLR reaffirmed its FY26 EBIT margin guidance at 5-7%, with free cash flow expected to be near break-even.

“Thanks to our talented people and the robust foundations we have built at JLR, we delivered an 11th successive profitable quarter amid challenging global economic conditions,” said Adrian Mardell, JLR CEO.

Commercial Vehicles: Margins resilient despite sales drop

Tata Commercial Vehicles revenue declined 4.7% to ₹17,009 crore as domestic volumes fell 9% year-on-year, though exports jumped 68%.

EBITDA margin improved to 12.2%, up 60 basis points, while EBIT margin rose to 9.7%, aided by better realisations and cost control.

“Despite adverse volumes, the business delivered 12.2% EBITDA and healthy ROCE of ~40%,” said Girish Wagh, Executive Director, Tata Motors. New launches included the Ace Pro mini-truck and air-conditioned cabins across the truck range.

Passenger Vehicles: Demand softness, EV share steady

Passenger Vehicle revenue fell 8.2% to ₹10,877 crore, with EBIT margin at negative 2.8% and EBITDA margin down 180 basis points to 4.0%.

Wholesale volumes slid 10.1% to 124,800 units. EV sales were at 16,200 units, down 2.1% but retaining a 36.7% market share.

“While the overall industry growth is expected to remain muted, we are confident that our recent and forthcoming series of launches—across ICE and EVs—will enable us to outperform the market,” said Shailesh Chandra, MD, TMPV and TPEM.

Corporate actions and outlook

The final NCLT hearing for Tata Motors’ demerger concluded with October 1, 2025, set as the effective date.

The company also announced a €3.8 billion voluntary tender offer to acquire Iveco Group N.V. (excluding Defence), expected to complete in H1 2026.

Group CFO PB Balaji said: “Despite stiff macro headwinds, the business delivered a profitable quarter, supported by strong fundamentals. As tariff clarity emerges and festive demand picks up, we are aiming to accelerate performance and rebuild momentum across the portfolio.”

Tata Motors expects demand conditions to remain challenging but plans to mitigate tariff impacts, improve product mix, and strengthen margins in the second half of FY26.