Tata Motors Limited — Q2 FY26 earnings call

Call held 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

  • 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

Key financials

6 periods

Headline

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

Q2

  • EBITDA Margin
    12.2%
  • EBIT Margin
    9.8%
  • ROCE
    45%
  • Free Cash Flow
    ₹2,200 Cr
  • Wholesale Volume
    97,000 units
    YoY +12%
  • Export Volume
    7,600 units
    YoY +75%
  • Consol EBITDA Margin
    11.4%

Q2 Standalone

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

H1

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

FY25

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

Consol Q2

  • Revenue
    ₹18,600 Cr

What they filed

Q1 FY27: revenue up 19.3%, net profit up 83.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue17,535 18,819 21,863 17,324 18,585 +6%21,847 +16%26,098 +19%20,667 +19%
EBITDA1,707 2,033 2,431 2,076 2,032 +19%2,587 +27%3,327 +37%3,272 +58%
Net profit498 1,355 1,340 1,397 -867 −274%705 −48%1,793 +34%2,556 +83%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Volume

  • H2 Industry Growth Volume · H2 FY26 · High confidence Single-digit to higher single-digit growth across segments
    We expect in H2, across the segments, there will be a single-digit to higher single-digit growth as we go ahead.

    — Girish Wagh

Profitability

  • EBITDA Margin Profitability · Ongoing · High confidence Sustained double-digit
    We will continue to sustain the profitable growth, robust financial performance, delivering double-digit EBITDA, cash flows and then strong ROCE.

    — Girish Wagh

Capex

  • Capex as % of Revenue Capex · Ongoing · High confidence 2-4%
    Prudent Capex spends, which are well within the guidance range of around 2% to 4% of revenue. This will continue to be in this range.

    — GV Ramanan

Iveco

  • Regulatory Approvals Iveco · Q4 FY26 · Medium confidence Expected by Feb-Mar 2026
    We expect all the approvals to come through by around February-March.

    — GV Ramanan

Risks & concerns

  • Iveco acquisition integration and funding

    medium

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

    Analyst bridge loan secured; refinancing options (equity/debt) to be evaluated post-approval

  • Market share pressure in SCV segment

    medium

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

    Management new launches driving retail recovery to 15,000/month after 18 months of pressure

  • Tata Capital investment mark-to-market

    low

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

    Management one-time accounting adjustment; no cash impact

  • Tipper segment seasonal weakness

    low

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

    Analyst seasonal - already recovering post monsoon; tipper market picking up well

Q&A highlights

4 direct
Export Growth Sustainability Direct
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

GST Impact on CV Demand Direct
GST cut has dual impact - direct benefit to B2C customers plus secondary effect of increased consumption driving higher freight and utilization.

GST cut is a structural positive for CV demand through both direct and indirect channels

Asked by Kapil Singh

DFC Impact on CVs Direct
Net-net, DFC will lead to an increase in overall CV volumes. But within that, negative impact on tractor trailer segment offset by increased ICV/MCV demand for hub-to-hub.

DFC is net positive for CV industry contrary to market fears - shifts mix but increases total volumes

Asked by Raghvendra Goyal, Ambit

Tata Capital MTM Loss Direct
Listed price on the IPO turned out to be almost 20%-25% lower than the earlier expected valuation price. Hence... mark-to-market adjustment of Rs 2,000 crores.

Non-cash one-off impacting consol PBT; underlying business PBT remains strong at Rs 1,500 crores

Asked by Aditya

1 min read 3 chapters

Detailed narrative

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.

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.

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.

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