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India’s largest commercial vehicle manufacturer, Tata Motors, on Wednesday reported an 83 per cent year-on-year increase in its consolidated net profit to ₹2,560 crore for the first quarter of the current financial year 2026-27 (Q1FY27). Revenue from operations also rose 19.3 per cent to ₹20,667 crore.
The company said profit growth was led in part by a mark-to-market gain on its investment in Tata Capital, alongside strong commercial vehicle volumes, market-share gains and operational improvements.
The results were announced after market hours. Tata Motors’ stock rose 1.59 per cent, ending the day’s trade at ₹456.85 per share on the BSE.
Signals more price hikes as commodity inflation hits margins
Tata Motors is likely to resort to further price increases to offset rising commodity costs, as the commercial vehicle maker faces continued input-cost pressure despite strong demand and a 26 per cent increase in domestic volumes in the June quarter.
The company has already raised prices twice since April, with a 2 per cent increase during the first quarter and another 2.5 per cent hike from July 1. Commodity inflation had an adverse impact of around 3.8 per cent on the business in the quarter, managing director and chief executive officer Girish Wagh said on Wednesday.
“Commodity inflation does remain a major headwind. We do see some more increase,” Wagh said during the company’s Q1FY27 earnings call, adding that pricing would remain the company’s first resort to deal with the pressure.
The comments come as Tata Motors’ strong volume growth failed to translate into an expansion in operating margins. The company’s earnings before interest, taxes, depreciation and amortisation (Ebitda) margin stood at around 10.9 per cent on a consolidated basis. The management said the trajectory of margins would depend on three factors: Commodity prices, the extent to which recent price increases settle in the market and volume growth.
“The margin growth will not happen only from volume growth,” Wagh said. “It will be a play of all these three variables.”
Tata Motors’ commercial vehicle sales remained strong during the quarter, with total CV volumes rising 26 per cent to 108,700 units, while domestic volumes increased 26 per cent. Exports rose 35 per cent, supported by growth in Indonesia and several markets in sub-Saharan Africa.
Fleet replacement drives HCV demand
Wagh said the company was seeing genuine demand for heavy commercial vehicles, led by large fleet operators replacing ageing vehicles.
The replacement cycle has continued into July, with fleet owners seeking better fuel economy, lower maintenance costs and an improved total cost of ownership from newer trucks.
The company is also increasingly tracking retail registrations through the government’s Vahan platform alongside wholesale volumes to ensure that growth is not being driven by inventory accumulation at dealerships.
The demand environment is being supported by infrastructure and mining activity, while e-commerce, fast-moving consumer goods (FMCG), and courier and parcel businesses are supporting demand for intermediate and light commercial vehicles. Tata Motors had earlier said HCV growth was being driven by freight availability, infrastructure and mining activity.
EV economics improve as fuel costs rise
Higher diesel and compressed natural gas (CNG) prices are also making electric commercial vehicles more attractive, Wagh said.
The increase in conventional fuel prices has reduced the time taken for electric vehicles to reach total-cost-of-ownership parity with diesel and CNG vehicles. Tata Motors expects EV penetration to improve, particularly in the second half of FY27.
The company is seeing increased enquiries from fleet operators looking to electrify their portfolios and is expanding its charging ecosystem through partnerships. Demand for smaller electric commercial vehicles is also spreading beyond metros into tier-II and tier-III towns.
However, the rapid increase in EV demand is creating supply-chain pressures. Tata Motors is facing shortages of some imported materials, particularly battery cells, which have long lead times. Wagh expects these constraints to come under control towards the end of the second quarter.
Iveco deal on track for November closure
Tata Motors also said its proposed acquisition of Iveco remains on track, with regulatory approval from Spain now secured and only French approval pending.
The company expects to receive the final clearance by the end of August, with the transaction likely to close by early November 2026, Wagh said.
The company has also increased its stake in logistics technology platform Freight Tiger to 63.6 per cent after acquiring an additional 18.1 per cent stake for ₹95.66 crore in May. The move is aimed at combining FleetEdge and Freight Tiger to build an end-to-end digital ecosystem covering the truck and freight sectors.
Indonesia shipments gather pace
Tata Motors had shipped around 2,600 vehicles to Indonesia by the end of July, with the programme now progressing at the required pace.
While Indonesia has emerged as a strong export market, Wagh said growth was not dependent on a single geography. Several markets in sub-Saharan Africa and other regions have also performed well, although West Asia remains challenging.
The company has also been addressing supply-chain constraints affecting its internal combustion engine portfolio. Capacity constraints in sheet metal, castings and forgings emerged as demand increased across the automotive industry, while labour migration affected supplies during the first quarter. Tata Motors said these issues have largely been addressed and throughput is improving.
Hydrogen trucks remain in pilot phase
Tata Motors is also continuing work on hydrogen-powered commercial vehicles under the government’s hydrogen mission.
The company is participating in pilot projects involving hydrogen trucks operating on three routes, with Indian Oil Corporation generating green hydrogen for the trials. Wagh said the pilots are intended to generate operating data before the technology can be considered for wider commercial deployment.
The company has also sought government intervention on import duties for certain electric vehicles, arguing that low duties on imported electric tractors could undermine local engineering and the development of a domestic EV supply chain.
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