Tata Motors Witnesses a Significant 63% Year-Over-Year Drop in Net Profit, Recording Rs 4,003 Crore in Q1 Earnings
Tata Motors Limited Reports Lower Net Profit for Q1 FY26
Tata Motors Limited, India's largest automobile manufacturer, announced a 62.7% decrease in its net profit for the first quarter of the financial year 2026 (Q1 FY26) compared to the same period last year (Q1 FY25). The decline was primarily due to a volume decline across all businesses and a sharp drop in profitability at Jaguar Land Rover (JLR), mainly due to the full quarter impact of US tariffs.
The company's revenue from operations fell by 2.5% year-on-year, hitting Rs 1,03,792 crore in Q1 FY26. JLR wholesale volumes declined by 10.7% year-on-year to 87,300 units, and revenue decreased by 9.2% to £6.6 billion. These declines were heavily affected by US tariffs, which cost around £250 million during the quarter.
The profit before tax dropped 59.6% to Rs 5,561 crore, and EBITDA fell 35.75% to Rs 9,657 crore, with the EBITDA margin shrinking from 14% to 9.2% year-on-year. Margins were under pressure mainly at JLR due to tariffs and adverse macroeconomic headwinds, which impacted contribution margins and profitability.
Despite the challenging environment, Tata Motors' Group Chief Financial Officer, P.B. Balaji, stated that the business delivered a profitable quarter. Total expenses in Q1 FY26 stood at Rs 1 lakh crore, marginally higher than the Rs 99.89 thousand crore reported in the same quarter of the previous fiscal year.
In a bid to drive long-term growth and unlock significant value, Tata Motors announced a 100% acquisition of Iveco Group N.V. (excluding Defence) shares. The acquisition aims to bring together complementary capabilities, global reach, and a shared strategic vision. The acquisition was done via a Voluntary Tender Offer to all public shareholders, and the announcement was made on 30 July 2025.
Despite the net profit decline, Tata Motors Limited's net profit for Q1 FY26 is Rs 4,003 crore. The company acknowledged the challenging demand environment and implied ongoing efforts to mitigate tariff effects, leverage brand strength, and improve product mix to restore margins.
In the April-June quarter, Tata Motors reported a total income of Rs 1.05 lakh crore, slightly lower compared to Rs 1.08 lakh crore recorded in Q1 FY25. The business was supported by strong fundamentals, as Balaji emphasized the focus on delivering a strong second-half performance, despite the upcoming demerger in October 2025.
[1] Tata Motors Limited Press Release, Q1 FY26 Results. (31 July 2025). [2] Tata Motors Limited Investor Presentation, Q1 FY26 Results. (31 July 2025). [3] Tata Motors Limited Management Discussion and Analysis Report, Q1 FY26 Results. (31 July 2025). [4] Jaguar Land Rover Plc Press Release, Q1 FY26 Results. (31 July 2025).
The challenging business environment, particularly in the automotive sector, was reflected in Tata Motors Limited's Q1 FY26 results, as the company reported a decline in both net profit and EBITDA due to decreased volume sales and increased US tariffs. This drop in profits also affected other sectors such as finance, as the company's total expenses for Q1 FY26 were marginally higher than the previous year. In an effort to drive long-term growth and unlock value, Tata Motors announced a 100% acquisition of Iveco Group N.V.'s shares, a move that will bring together complementary capabilities from various industries, including transportation.
