Tata Motors Posts Strong Q3 FY26 Results; Commercial Vehicles Segment Delivers Double-Digit Margins

Mumbai – Tata Motors Limited (TML) on Thursday announced a robust financial performance for the quarter ended December 31, 2025, driven by strong execution, higher volumes, and sustained focus on profitable growth in its Commercial Vehicles (CV) segment.

Commercial Vehicles Segment: Key Highlights

Tata Motors’ CV business reported Q3 FY26 revenue of ₹21,533 crore, up from ₹18,478 crore in the corresponding quarter last year. EBITDA rose to ₹2,736 crore, with margins improving to 12.7 percent, marking the 10th consecutive quarter of double-digit EBITDA margins. EBIT margin also crossed the double-digit mark at 10.6 percent, supported by better realizations and volume growth.

Profit before tax (before exceptional items) stood at ₹2,290 crore, registering a 36 percent year-on-year increase. Strong operating performance and efficient working capital management resulted in free cash flow (FCF) of ₹4,752 crore for the quarter, while nine-month FCF reached ₹5,169 crore. Return on capital employed (ROCE) improved sharply to 53 percent, compared with 38 percent in Q3 FY25.

As of December 31, 2025, Tata Motors’ domestic CV business remained net cash positive at ₹3,900 crore.

Consolidated Financial Performance

On a consolidated basis, Tata Motors reported revenue of ₹21,800 crore, up 16 percent year-on-year. EBITDA margin stood at 12.5 percent, while EBIT margin improved to 10.4 percent. Profit before tax (before exceptional items) was ₹2,600 crore, and profit after tax came in at ₹700 crore.

The company reported a net cash position of ₹6,100 crore as of December 31, 2025, including the net impact of TMF Holdings’ investments.

Exceptional Items and Corporate Actions

Exceptional items during the quarter included impacts related to the New Labour Code (₹603 crore), demerger costs (₹962 crore), and acquisition expenses (₹82 crore). The total exceptional impact stood at ₹1,500 crore in standalone financials and ₹1,600 crore on a consolidated basis.

The Board of Directors also approved a Composite Scheme of Amalgamation to merge TMF Holdings Limited and TMF Business Services Ltd with Tata Motors Limited. The proposed merger, subject to regulatory and shareholder approvals, will not affect TML’s shareholding structure and is aimed at simplifying the group’s corporate structure.

Business and Market Performance

During the quarter, Tata Motors recorded CV wholesales of 116,800 units, reflecting 20 percent year-on-year growth. Domestic CV volumes rose 18 percent, while exports surged 70 percent. The company’s domestic CV VAHAN market share increased by 100 basis points sequentially to 35.5 percent in Q3 FY26.

Key product and innovation highlights included the launch of 17 next-generation trucks, the introduction of the Azura series for the ILMCV segment, and the showcasing of Tata trucks.ev, India’s widest electric truck portfolio. All truck platforms now comply with stringent European safety standards (ECE R29-03), and Tata Motors also unveiled a new Euro 6 range for Middle East and North Africa markets.

Outlook for FY26

Looking ahead, Tata Motors expects commercial vehicle demand to strengthen further in Q4 FY26, supported by continued government-led infrastructure spending and expansion across end-use sectors. The company said its optimized product portfolio, pricing strategy, and deeper customer engagement will help unlock demand across segments.

Commenting on the results, Girish Wagh, MD & CEO, Tata Motors Ltd, said the company’s disciplined execution and recent product launches under the “Better Always” philosophy have strengthened its leadership position in safety, total cost of ownership, and sustainable mobility.

GV Ramanan, CFO, Tata Motors Ltd, added that strong operational execution and disciplined capital management have translated into robust free cash flow generation, reinforcing confidence in delivering the company’s stated financial guidance.