Staff Writer
Mumbai: Tata Motors Limited reported a strong performance in its commercial vehicles business for the quarter ended December 31, 2025, driven by higher volumes, improved realisations and disciplined execution. The company’s commercial vehicles segment posted revenue of ₹21,533 crore in Q3 FY26, up from ₹18,478 crore in the same quarter last year, reflecting year-on-year growth of ₹3,055 crore.
Operating profitability continued to strengthen, with EBITDA margin improving to 12.7 percent from 12.4 percent a year earlier. EBITDA for the quarter rose to ₹2,290 crore, supported by better operating leverage and sustained focus on profitable growth. EBIT margin crossed the double-digit mark to reach 10.6 percent, a 100 basis point improvement over Q3 FY25, marking a key milestone for the segment. Profit before tax (before exceptional items) increased sharply to ₹2,290 crore, compared with ₹1,681 crore in the corresponding period last year.
For the nine-month period ended December 2025, the commercial vehicles business reported revenue of ₹56,912 crore, compared with ₹53,551 crore in the same period of the previous year. EBITDA margin for the nine months improved to 12.4 percent from 11.6 percent, while EBIT margin rose to 10.1 percent from 8.8 percent. Profit before tax for the period stood at ₹5,616 crore, up from ₹4,409 crore last year.
Strong operating performance and efficient working capital management resulted in robust free cash flow generation. The segment reported free cash flow of ₹4,752 crore in Q3 FY26 and ₹5,169 crore for the nine-month period. Return on capital employed for the quarter stood at a strong 53 percent, compared with 38 percent in Q3 FY25. As of December 31, 2025, the domestic commercial vehicles business was in a net cash position of ₹3,900 crore.
On a consolidated basis, Tata Motors reported revenues of ₹21,800 crore for the quarter, up 16 percent year-on-year. Consolidated EBITDA margin stood at 12.5 percent, while EBIT margin improved to 10.4 percent. Consolidated profit before tax (before exceptional items) was ₹2,600 crore, and profit after tax stood at ₹700 crore. The company ended the quarter with a consolidated net cash position of ₹6,100 crore, including the net impact of TMF Holdings’ debt and investments in Tata Capital.
The quarter included exceptional items related to the implementation of the New Labour Code, demerger-related costs and acquisition expenses. The combined impact of these items stood at approximately ₹1,500 crore in standalone financials and ₹1,600 crore in consolidated financials.
During the quarter, the Tata Motors board approved a composite scheme of amalgamation to merge TMF Holdings Limited and TMF Business Services Limited, both wholly owned subsidiaries, with Tata Motors. The proposed restructuring, subject to regulatory and other approvals, will not impact the company’s shareholding structure and is expected to simplify and streamline the group’s operations.
Operationally, the commercial vehicles segment recorded wholesales of 116,800 units during the quarter, representing growth of 20 percent year-on-year. Domestic and export volumes rose by 18 percent and 70 percent respectively. Tata Motors also reported a sequential increase of 100 basis points in its domestic CV VAHAN market share, which stood at 35.5 percent in Q3 FY26.
The company continued to expand its product portfolio, launching 17 next-generation trucks aimed at setting new benchmarks in safety, profitability and sustainability. It introduced the Azura series for the intermediate and light commercial vehicle segment and showcased Tata trucks.ev, its widest electric truck range to date. All truck platforms now comply with stringent European safety standards, and the company also unveiled its new Euro 6 range tailored for Middle East and North Africa markets.
Looking ahead, Tata Motors said it expects demand to strengthen further in the fourth quarter of FY26, supported by continued infrastructure spending and expansion across key end-use sectors. The company believes its optimised portfolio, pricing strategy and deeper customer engagement will help sustain growth momentum.
Commenting on the performance, Girish Wagh, Managing Director and Chief Executive Officer of Tata Motors, said disciplined execution of an agile strategy, combined with festive season demand and policy tailwinds, had driven another strong quarter. He added that the launch of next-generation trucks under the company’s “Better Always” philosophy reinforces Tata Motors’ commitment to safety, lower total cost of ownership and emission-free mobility.
GV Ramanan, Chief Financial Officer, Tata Motors, said the company delivered another quarter of strong financial outcomes, marking its tenth consecutive quarter of double-digit EBITDA margins. He noted that robust free cash flow generation and disciplined working capital management have strengthened the balance sheet, keeping the company on track to meet its stated financial guidance.
