Tata Motors shares surge nearly 3% despite weak Q1 earnings; here is what management said

The country's largest commercial vehicle maker on Friday reported a consolidated net profit of ₹3,924 crore in the first quarter of the current financial year (Q1FY26), marking a decline of 30% from ₹5,643 crore in the same period last year.

Last seen, the stock was trading at ₹648.20 per share on the National Stock Exchange, jumping 2.29%.

“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,” said PB Balaji, Group Chief Financial Officer, Tata Motors.

Here are all key updates from Q1 FY26:

• Tata Motors' revenue from operations declined 2.5% to ₹1.04 lakh crore in the April-June period from ₹1.07 lakh crore in the year-ago period.

• The company's operating profit declined 33% to ₹10,224 crore, and its operating profit margin contracted to 9.79%.

• JLR revenues were down by 9.2% to £6.6 billion with EBIT margins of 4.0% (-490 bps) affected by the US trade tariff impact.

• Tata Motors' passenger vehicle business clocked revenue of ₹10,900 crore with an EBITDA margin of 4%. During the quarter, its passenger vehicle wholesales declined 10% annually to 124,800 units, and electric vehicle sales fell 2.1% to 16,200 units.

• In the commercial vehicles segment, the company said it posted wholesales at 88,000 units, down 6%.

• Addressing an earnings call, Balaji said, “In the current quarter, we (JLR) have got hit by almost 250 million pounds on (US) tariff charges because even though the deal (UK-US trade deal) was announced on May 8, it got ratified only on June 30, and it is not with retrospective effect.”

• Going forward, he said the correction for the reduction in tariffs from 27.5% to 10% under the US-UK trade deal and 27.5% to 15% under the US-EU deal, along with the removal of the penalty for emission in the US, will play through.

• Meanwhile, the rare earth magnet shortage issue has had no impact on the production of Tata Motors' and JLR's electric vehicles and is unlikely to in the foreseeable future, although there are a few challenges in the coming quarters, Balaji said.

Management commentary

"With the demand situation likely to remain challenging, we will continue to focus on strengthening the business fundamentals and mitigating the impact of tariffs by leveraging the brand strength to drive a better mix and targeted actions to improve contribution margins," Tata Motors said.

"We have witnessed tailwinds towards the end of Q1 – Tiago and Altroz have seen a 22% increase in bookings on June 25, while the Harrier.ev launch has been extremely well received. Curated variants of Harrier & Safari have been launched at competitive price points. July recorded the highest-ever monthly EV sales, a significant milestone in the zero-emission journey," the company further added.

Tata Motors is well positioned to leverage its new launches—including hatchbacks and SUVs—while continuing to build on the EV momentum, it said. The Mumbai-based firm plans to focus on improving profitability through key levers like aftersales transformation, leveraging technology and structural cost reduction.