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Tata Motors Q1 results: PAT down 63% on JLR tariff hit, lower volumes
EBITDA margin contracted 480 basis points year-on-year to 9.2 per cent. The stock was down 2.19 per cent on the BSE as profit came in below analyst estimates, though revenue was in line with expectations.
The company said the final hearing for the scheme of demerger had been concluded on Friday by the National Company Law Tribunal (NCLT), and the order is reserved. 'We aim to complete it this quarter, with 1 October being the effective date,' it said.
Tata Motors noted that the demand environment is likely to remain challenging.
PB Balaji, Group Chief Financial Officer, Tata Motors, said: 'As tariff clarity emerges and festive demand picks up, we are aiming to accelerate performance and rebuild momentum across the portfolio. Against the backdrop of the upcoming demerger in October 2025, our focus remains firmly on delivering a strong second-half performance.'
On the rare earth magnet shortage, Balaji clarified that there was no stress at present in either the domestic business or at JLR. 'We are working through the problems and we are confident,' he said.
JLR revenue declined 9.2 per cent to £6.6 billion with EBIT margin at 4 per cent, down 490 basis points, impacted by US trade tariffs. Wholesale volumes and revenue were hit by the 27.5 per cent US tariffs on UK- and EU-produced vehicles exported to the US, and the planned wind-down of legacy Jaguar models ahead of new launches.
CV revenue came in at ₹17,000 crore (down 4.7 per cent), while EBITDA margin improved to 12.2 per cent (+60 bps), supported by better realisations and cost savings despite lower volumes. PV revenue declined 8.2 per cent due to weak industry demand and the transition to new models. As a result, EBITDA margin for PV dropped 180 bps to 4 per cent.
Despite these headwinds, consolidated profit before tax (PBT) before exceptional items stood at ₹5,600 crore, supported by a sharp reduction in finance costs, the company said.
As for JLR, it delivered its eleventh consecutive profitable quarter amid challenging global economic conditions. Free cash flow was negative £758 million, with a cash balance of £3.3 billion. JLR plans to invest £18 billion over five years from 2024, funded by operating cash flows. Guidance for FY26 remains unchanged, with EBIT margin expected in the 5–7 per cent range and free cash flow projected to be close to zero.
JLR welcomed the UK–US trade deal that lowers tariffs on UK-produced vehicles exported to the US from 27.5 per cent to 10 per cent, effective 30 June 2025. 'The EU–US trade deal announced on 27 July 2025 will, in due course, reduce tariffs on JLR's EU-produced vehicles exported to the US from 27.5 per cent to 15 per cent,' the company said.
Q1FY26 began on a subdued note for the CV industry, with muted performance in the heavy CV and small CV passenger segments, while buses, vans, and intermediate and light CVs showed modest year-on-year growth. Domestic volumes declined 9 per cent, while exports grew 68 per cent.
With forecasts of a healthy monsoon, a repo rate cut, and renewed infrastructure push, Tata Motors expects CV volumes to improve progressively in the coming quarters.
Girish Wagh, Executive Director, Tata Motors, said: 'Despite adverse volumes, the business delivered 12.2 per cent EBITDA and a healthy ROCE of 40 per cent. The acquisition of IVECO Group is a strategic leap forward in our ambition to build a future-ready commercial vehicle ecosystem.'
For the PV business, wholesale volumes fell 10.1 per cent to 1,24,800 units due to industry decline and transitions for the new Altroz, Harrier and Safari models. EV wholesales stood at 16,200 units (down 2.1 per cent), with EV penetration steady at 13 per cent and CNG penetration at 27 per cent. VAHAN market share stood at 12.3 per cent in Q1FY26, while EV market share was 36.7 per cent.
Profitability in the PV segment was impacted by adverse volumes, realisations and operating leverage, though partly offset by continued efforts to reduce variable costs.
Shailesh Chandra, Managing Director, Tata Motors PV and Tata Passenger Electric Mobility, said: 'Looking ahead, 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 and strengthen our position across key segments.'
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