Tata Motors bets on demand surge in second half as core Q2 profit doubles

New Delhi: Tata Motors Ltd plans to pick up sales momentum in the second half of the financial year after profits from its core commercial vehicle business more than doubled in the September quarter.

The country’s largest commercial vehicle manufacturer suffered a consolidated loss ₹A profit of 867 billion lira was made in the July-September period ₹It had recorded a loss of 498 crore a year ago ₹2,027 crore, according to the exchange filing. The loss was due to a decline in the valuation of its investments in Tata Capital Ltd. Shares of Tata Motors’ group peer have fallen 2% since its IPO in October.

setting for Tata Capital investment made a net profit ₹1,159 crore, more than double ₹The company had recorded ₹498 crore a year ago.

This was the first quarter in which Tata Motors, which currently houses the Tata Group’s commercial vehicles business, started independent financial reporting after completing its spin-off from its passenger vehicle unit.

Revenue increased 6% year over year this quarter ₹18,757 crore.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, margin improved 140 basis points to 11.4%, driven by volume expansion efforts. EBITDA is a measure of operating income.

Earnings of other commercial vehicle majors

The earnings of commercial vehicle giants, including Tata Motors and rivals Ashok Leyland Ltd and Mahindra and Mahindra Ltd, are considered a representative indicator of economic growth in the country.

Ashok Leyland reported a 7% annual increase in profit after tax ₹820 crore, with revenue up 13% ₹12,577 crore in the July-September quarter.

Mahindra and Mahindra do not report financials for the commercial vehicle segment separately but said in its earnings conference call on November 4 that it expects good growth in the commercial vehicle segment. Sales of commercial three-wheelers and four-wheelers rose 37% year-on-year to 38,684 units in the July-September period.

Comments from Tata Motors management indicate that there is a growth momentum in economic spending and the benefits of tax cuts are expected to continue in the second half of fiscal 2025-26.

“We are yet to see the full benefit of GST when passed on to consumers,” Girish Wagh, managing director and CEO of Tata Motors Ltd, said in the post-earnings press conference. He said the second half is expected to be better than the first six months, when some consumers postponed their purchasing decisions due to the announcement of cuts in GST rates.

The company turned free cash flow positive in the quarter ₹2,000 crore from negative cash ₹2,000 crore in the first quarter ended June.

Net cash on the company’s balance sheet ₹1,200 crore as of September.

Tata Motors’ wholesale sales rose 12% year-on-year to 97,000 units in the quarter. This was due to the 11% increase in small commercial vehicle sales to 31,400 units. In the heavy commercial vehicle segment, 24,000 units were sold, an increase of 5% compared to the previous year. Medium CV sales increased 14% to 16,800 units.

“We expect a strong second half for FY26. Construction, infrastructure and mining activities will gain momentum, further increasing the demand for trucks and dump trucks,” the company said in its statement.

For Iveco, which it bought for $4.4 billion, Wagh said the company is trying to complete all regulatory approvals required for the acquisition before announcing any plans for integration and future growth.

The Tata Motors-Iveco combination is expected to sell more than 540,000 vehicles annually and generate revenues of more than $25 billion.

For now, Wagh and the company expect domestic sales momentum to pick up in the medium and heavy commercial service segment, helping revenue and profit in the next two quarters.

“The increase in infrastructure spending generally leads to an increase in medium and heavy commercial vehicle sales, so growth should be higher in the coming quarters,” Wagh told reporters during the post-earnings call.

Shares of Tata Motors fell by 2.84% during trading hours on Thursday, while shares of Nifty Auto accounted for a decline of 0.37% on the day.

Shares of the commercial vehicle company that will soon incorporate it were also purchased. Italian truck and bus manufacturer IvecoIt closed with a 27% premium compared to the discovered price. ₹330 each on the NSE on Wednesday. Shares of Tata Motors are listed at: ₹335, 28% premium compared to its discovered price ₹260.75.