Tata Motors returns to profit at ₹ 1,254 crore in Q2 as CV sales grow 42% | Today’s news
New Delhi: India’s largest commercial vehicle maker Tata Motors Ltd returned to profit in the July-September quarter as higher sales and a smaller loss on equity investment in Tata Capital lifted its bottom line as the company said it expected to begin integrating Italian truck maker Iveco Group into its operations in the January-March quarter.
The Mumbai-based truck and bus maker posted a net profit ₹1,254 crore compared to a loss ₹867 crore in the previous period. Sales increased by 36% year-on-year. ₹25,338 crore, driven by higher sales and market share gains.
Sales increased 42% to 135,100 units during the quarter. Tata Motors’ overall share of the domestic commercial vehicle market, based on data from government portal Vahan, stood at 36.2% in the first half of FY27, up 110 basis points from FY26.
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Tata Motors reported a net profit of ₹1,254 crore for the July-September quarter, compared with a loss of ₹867 crore a year earlier.
Revenue grew 36% year-on-year to ₹25,338 crore, while car sales rose 42% to 135,100 units. Growth was supported by higher sales and market shares.
EBITDA margin fell 40 basis points to 10.9% as commodity costs increased. Tata Motors said it was responding with austerity measures and calibrated price increases.
Tata Motors expects the domestic commercial vehicle industry to register double-digit growth for the full year. He said the pace of growth may moderate as the higher base takes effect, rather than due to a slowdown in demand.
Tata Motors expects to begin integrating Iveco into its operations in the January-March quarter, once the tender offer process is complete.
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Management said the improvement in profitability was partly supported by a higher loss on capital investments in the prior-year quarter, which provided a lower basis for comparison. This helped offset some of the pressure from higher commodity costs.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 40 basis points to 10.9% as commodity costs rose, prompting the company to implement calibrated price increases and cost-saving measures.
Girish Wagh, managing director and managing director of Tata Motors, said revenue growth is expected to moderate as the impact of a higher base plays out, but the company expects the domestic commercial vehicle industry to post double-digit growth for the full year.
“While the growth momentum from now is likely to continue in the third quarter, the growth rate will definitely moderate in terms of base effect. So not a slowdown in demand, but the growth rate will come down. But as we stand here today, I think FY27 is likely to end with double-digit growth for the entire industry,” Wagh said.
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Automakers’ commentary on the impact of rising commodity prices will be closely watched across the sector, with Tata Motors the first to announce its results. Rising inflation and higher interest rates could also affect vehicle demand in the coming months.
“Our first line of attack will be to maintain cost efficiency and control variable costs. The second will be to control expenses. And thirdly, we are also doing calibrated price increases every quarter,” Wagh said at a media conference after announcing the results.
“We are maintaining this delicate balance, ensuring that demand dynamics are not derailed while maintaining the double-digit EBITDA margin that we have committed to the market,” he added.
Iveco integration in the spotlight
Tata Motors said its 3.9 billion euro acquisition of Iveco is progressing as expected and expects to begin integrating the Italian truck maker into its operations in January-March, following the completion of the tender offer process.
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The company expects the offer to be settled by the end of this month. The current acceptance level is 35%, Wagh said.
“As is usually seen in tender offer processes, a significant portion of the shares tend to be tendered at the very end of the acceptance period, especially in the last 24-48 hours. We therefore remain confident of the successful completion of the acquisition and look forward to the combination of Tata Motors and IVECO Group,” he said.
Tata Motors must reach the 80% acceptance threshold by October 26 to acquire the shares needed to spin off Iveco and make it a 100% subsidiary, in line with the original plan announced in July 2025.
Wagh said the offer price was increased from €14.10 to €14.40 per share as a goodwill gesture to compensate shareholders for the delay in completing the transaction. The deal was originally expected to close by June 2026, but was delayed by regulatory processes and is now expected to close next month.
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The price increase followed a September statement by activist investor Petrus Advisers, which said the offer remained too low and did not fully compensate shareholders for the transaction.
“With the best offer that we have given, we are quite confident that the voluntary tendering will cross 80% and therefore a less than 80% scenario will not happen,” Wagh said.
With the Iveco acquisition expected to close soon, Tata Motors reiterated its expectation of double-digit domestic sales growth for the full year, despite concerns that a higher base could dampen growth.
Shares of Tata Motors fell 4.4% on Friday. The company announced its results after market hours.
