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    TMCV

    TMCVNeutral
    Capital Goods·13 Nov 2025
    Management Summary

    TMCV's first standalone earnings call post-demerger showcased a strong commercial vehicles franchise with double-digit EBITDA, 45% ROCE, and record H1 free cash flow. The business demonstrated resilience with 12% volume growth despite transitioning through GST cuts. Management highlighted structural improvements in cash generation capability - FCF at 10% of revenue. The Iveco acquisition is progressing with funding secured. Key demand drivers include GST-driven consumption boost, improving fleet utilization, and recovery in mining/construction. The Rs 2,000 crore Tata Capital MTM loss was a non-cash one-off at consolidated level.

    Highlights

    10

    • Successfully completed demerger - listed as Tata Motors Limited (TMCV) on BSE and NSE

    • Q2 revenue Rs 18,400 crores, up 6.6% YoY; EBITDA at 12.2% (double-digit); EBIT at 9.8% (+200bps YoY)

    • Wholesale volumes at 97,000 units, up 12% YoY with growth across all product lines

    • Exports grew 75% YoY, back to pre-COVID levels of 7,600 units quarterly

    • Q2 free cash flow of Rs 2,200 crores; H1 FCF highest ever at Rs 4,170 crores

    • ROCE at 45% - continued strong performance

    • PBT at Rs 1,700 crores (standalone); Consol PBT impacted by Rs 2,000 crores Tata Capital MTM loss

    • First to pass full GST reduction benefit to customers

    • Iveco acquisition regulatory approvals underway; bridge loan secured with overwhelming bank response

    • PM E-DRIVE tender participation through consortium model with favorable conditions

    What Changed2

    vs Q3 FY26

    Tone shiftConfident and strategically focused with strong execution track record → Confident and proud - first standalone call post-demerger with strong results to showcaseGuidance items5 → 4 (-1)
    Key financials

    Metrics

    20

    Periods

    6

    Headline

    4
    • Tata Capital MTM Loss
      ₹-2,000 Cr
    • Consol Net Cash
      ₹1,200 Cr
    • Revenue CAGR since FY22
      13%
    • Digital Retails (% of total)
      27%

    Q2

    7
    • EBITDA Margin
      12.2%
    • EBIT Margin
      9.8%
    • ROCE
      45%
    • Free Cash Flow
      ₹2,200 Cr
    • Wholesale Volume
      97,000 units
      YoY+12%

    Q2 Standalone

    2
    • Revenue
      ₹18,400 Cr
      YoY+6.6%
    • PBT
      ₹1,700 Cr

    H1

    3
    • Free Cash Flow
      ₹4,170 Cr
    • Cash Profit After Tax
      ₹4,200 Cr
    • Vahan Market Share
      35.3%

    FY25

    3
    • Revenue Run Rate
      ₹75,000 Cr
    • FCF as % of Revenue
      10%
    • Absolute FCF
      ₹7,400 Cr

    Consol Q2

    1
    • Revenue
      ₹18,600 Cr

    Guidance & targets

    4
    CategoryTargetPriority
    Volume
    H2 Industry Growth
    Single-digit to higher single-digit growth across segments
    		High
    Profitability
    EBITDA Margin
    Sustained double-digit
    		High
    Capex
    Capex as % of Revenue
    2-4%
    		High
    Iveco
    Regulatory Approvals
    Expected by Feb-Mar 2026
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Iveco acquisition integration and funding

    Large acquisition requiring regulatory approvals by Feb-Mar 2026. Bridge loan funded initially; permanent capital structure TBD. — Analyst acknowledged

    medium

    Market share pressure in SCV segment

    SCV market share remained flat at lower level. Competition intense in the segment. — Management acknowledged

    medium

    Tata Capital investment mark-to-market

    Rs 2,000 crores MTM loss on Tata Capital investment at IPO price vs earlier valuation. — Management acknowledged

    low

    Tipper segment seasonal weakness

    HCV tipper utilization down due to extreme rains but rebounding as expected. — Analyst acknowledged

    low

    Q&A highlights

    4

    “Combination of lower base and increase in markets - Sri Lanka opened up, Middle East and Africa improving.”

    Exports at 7,600 units back to pre-COVID levels with 75% YoY growth - new market opportunities emerging

    asked by Amyn Pirani, JPMorgan

    1 min read3 chapters

    Detailed Narrative

    01

    Post-Demerger: A Pure-Play CV Franchise With Strong Economics

    TMCV's maiden standalone call post-demerger showcased the structural quality of the CV business. Revenue at Rs 75,000 crores run-rate with 13% CAGR since FY22. EBITDA expanded 5x since FY22 with consistent double-digit margins. FCF at 10% of revenue (Rs 7,400 crores in FY25) demonstrates cash generation capability even when HCV volumes declined 9%. ROCE at 45% and net cash position at Rs 1,200 crores (consol). Capex discipline maintained at 2-4% of revenue with focus on decarbonization and circularity.

    02

    Volume Recovery and Market Dynamics

    Q2 wholesale volumes of 97,000 units were up 12% YoY with broad-based growth. HCV grew 5% (vs 2% industry), ILMCV 15% (vs 11% industry), SCV in line at 11%. Exports surged 75% YoY to pre-COVID levels driven by Sri Lanka, Middle East, and Africa. GST cuts providing dual demand stimulus - direct benefit to B2C customers and indirect boost through increased consumption/freight. Market share at 35.3% in H1 with trucks rebounding strongly from Q2 mid-point. SCV retail recovery to 15,000/month after 18 months is encouraging.

    03

    Digital and EV Ecosystem Building

    Fleet Edge platform has 885,000 active vehicles with 75% monthly active users. Mileage Saarthi delivering 7%+ fuel efficiency improvement. Fleetverse did 22,000 platform-assisted retails in Q2. Digital-generated retails now 27% of total. E-Dukaan now serving 10,000 customers with direct-to-customer delivery in 8 cities. Electric mobility: all existing e-bus tenders delivered (3,700 buses registered). AcePro EV launched with 400+ monthly retails. Participating in PM E-DRIVE tender through consortium model with favorable payment security and asset-light structure.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.