Tata Motors Q1 results: PAT down 30.5% on JLR tariff hit, lower volumes

Tata Motors’ (TaMo’s) profit after tax (PAT) for the first quarter of 2025-26 (Q1FY26) fell by 30.5 per cent to ₹3,924 crore, compared to ₹5,643 crore in Q1FY25, from continuing operations. The profit was impacted by a decline in volumes in all businesses, and a drop in profitability, primarily at Jaguar Land Rover (JLR). Consolidated revenues were also down 2.5 per cent to ₹1,04,407 crore as JLR revenues fell by 9.2 per cent, commercial vehicle (CV) revenues by 4.7 per cent and passenger vehicle (PV) revenues declined by 8.2 per cent, reflecting softness in industry demand. 

The Ebitda margin was down 480 basis points (bps) year-on-year (Y-o-Y) to 9.2 per cent. Ebitda stands for earnings before interest, tax, depreciation, and amortisation. 

 

The stock was down 2.19 per cent on the BSE as the profit came in below analyst estimates even as the revenues were in line with estimates. 

The company said that the final hearing for the scheme of demerger has been concluded on Friday by the National Company Law Tribunal (NCLT), and the order is reserved. “We aim to complete it this quarter, with October 1 being the Effective Date,” it said. 

Tata Motors felt that going forward the demand situation is likely to remain challenging. 

P B 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 rare-earth magnet shortage, Balaji clarified that at this point in time, they don’t see any stress in both domestic business and even JLR. “We are working through the problems and we are confident,” he said. 

JLR revenues were down by 9.2 per cent to 6.6 billion pounds, with Ebit margins of 4 per cent, down 490 bps affected by US trade tariff impact. Wholesale volumes and revenues in the quarter were impacted by the application of 27.5 per cent US trade tariffs on UK- and EU-produced cars exported to the US, and the planned wind down of legacy Jaguar vehicles ahead of the launch of new Jaguar. 

 

CV revenues came in at ₹17,000 crore (down 4.7 per cent) while the Ebitda margins improved to 12.2 per cent (+60 bps) benefiting from better realisations and cost savings despite lower volumes. PV revenues declined by 8.2 per cent, reflecting softness in industry demand and transition to new models. As a result, Ebitda at 4 per cent was down by 180 bps. 

Despite these challenges, the consolidated profit before tax (PBT) before exceptional items was ₹5,600 crore benefiting from the sharp reduction in finance costs, the company said. 

As for JLR, it delivered the 11th consecutive profitable quarter amid challenging global economic conditions. JLR’s free cash flow for the quarter was negative 758 million pounds, with a cash balance of 3.3 billion pounds. JLR plans to invest 18 billion pounds over the five-year period starting 2024, funded by operating cash flows. Guidance for FY26 remains unchanged, with Ebit margin in the range of 5-7 per cent, and with FY26 free cash flow close to zero. 

Girish Wagh, executive director, Tata Motors, said: “Despite adverse volumes, the business delivered 12.2 per cent Ebitda and a healthy ROCE (return on capital employed) 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.” 

As for PVs, wholesale volumes were down 10.1 per cent to 124,800 units due to industry decline and transitions for new models of Altroz, Harrier, and Safari. 

Electric vehicle (EV) wholesales at 16,200 units (-2.1 per cent), EV penetration was steady at 13 per cent while CNG penetration was at 27 per cent in Q1FY26. VAHAN registration market share came in at 12.3 per cent in the quarter. 

EV market share stood at 36.7 per cent. Profitability was impacted as a result of adverse volumes, realisations, and impact of leverage, but was offset in part by the company’s continued drive on savings in 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.”