Tata Motors returns to profit with ₹1,254 crore in Q2 earnings as CV sales rise 42%

New Delhi: India's largest commercial vehicle maker Tata Motors Ltd returned to profit in the July-September quarter as higher sales and a smaller loss on equity investments in Tata Capital lifted its bottom line as the company said it expects to begin integrating Italian truck maker Iveco Group into its operations in the January-March quarter.

The Mumbai-based truck and bus maker reported a net profit of ₹1,254 crore, compared with a loss of ₹867 crore in the year-earlier period. Revenue rose 36% year-on-year to ₹25,338 crore, driven by higher sales and market-share gains.

Sales rose 42% to 135,100 units during the quarter. Tata Motors' overall domestic commercial vehicle market share, based on data from the government's Vahan portal, stood at 36.2% in the first half of FY27, up 110 basis points from FY26.

Management said the improvement in profitability was partly aided by a higher loss on equity investments in the year-earlier quarter, which provided a lower base for comparison. This helped offset some of the pressure from higher commodity costs.

Earnings before interest, tax, depreciation and amortization (EBITDA) margin fell 40 basis points to 10.9% as commodity costs rose, prompting the company to take calibrated price increases and pursue cost-saving measures.

Girish Wagh, managing director and chief executive of Tata Motors, said sales growth is expected to moderate as the impact of a higher base kicks in, but the company expects the domestic commercial vehicle industry to post double-digit growth for the full year.

"While the growth momentum as of now is likely to continue in Q3, the growth rate will certainly moderate from a base-effect perspective. So, not a demand slowdown, but the growth rate will go down. But as we stand here today, I think FY27 is likely to end with double-digit growth for the overall industry," Wagh said.

Automakers' commentary on the impact of rising commodity prices will be closely watched across the sector, with Tata Motors the first to announce its results. Rising inflation and higher interest rates could also weigh on vehicle demand in the coming months.

"Our first line of attack will be to keep driving cost efficiencies and controlling variable costs. The second will be to control expenses. And third, every quarter, we have also been taking calibrated price increases," Wagh said at a media conference after the results announcement.

"We have been maintaining this fine balance, ensuring that the demand momentum is not derailed, while also maintaining the more than double-digit EBITDA margin that we have committed to the market," he added.

The company expects the offer to be settled by the end of this month. The current acceptance level stands at 35%, Wagh said.

"As is typically seen in tender offer processes, a significant proportion of shares tend to be tendered towards the very end of the acceptance period, particularly in the final 24-48 hours. We therefore remain confident of a successful completion of the acquisition and look forward to bringing Tata Motors and IVECO Group together," he said.

Tata Motors needs to reach an 80% acceptance threshold by 26 October to acquire the shares required to delist Iveco and make it a wholly owned subsidiary, in line with the original plan announced in July 2025.

Wagh said the offer price was raised from €14.10 to €14.40 per share as a goodwill gesture to compensate shareholders for delays in completing the transaction. The deal was initially expected to close by June 2026 but has been delayed by regulatory processes and is now expected to close next month.

The price increase followed a September statement by activist investor Petrus Advisers, which said the offer remained too low and did not fully compensate shareholders for the transaction.

"With the best offer that we have given, we are quite confident that voluntary tendering will cross 80%, and therefore a scenario of that being lower than 80% won't arise," Wagh said.

With the Iveco acquisition expected to be completed soon, Tata Motors reiterated its expectation of double-digit sales growth in the domestic market for the full year, despite concerns that a higher base could moderate growth.

Tata Motors shares fell 4.4% on Friday. The company announced its results after market hours.