Tata Motors Q1 Profit Plunges 63% on Volume Decline and JLR Weakness

Tata Motors Ltd (TML) has reported a sharp decline in its June quarter earnings, with consolidated net profit falling 62.6% to Rs 3,924 crore from Rs 10,514 crore in the same period last year. Revenue from operations slipped 2.5% to Rs 1,04,407 crore, weighed down by weaker volumes across all business segments and a significant drop in profitability at Jaguar Land Rover (JLR).

Operating profit fell 33% to Rs 10,224 crore, while the operating profit margin contracted to 9.79%. The company attributed the weak performance to volume declines across businesses and lower profitability, primarily at JLR.

JLR’s revenue declined 9.2% year-on-year to £6.6 billion, with EBIT margins at 4.0%—down 490 basis points—impacted by softer demand and US trade tariffs under the Donald Trump administration. EBITDA margin came in at 9.3%, marking a 650 basis points YoY drop.

"With demand conditions expected to remain challenging, we will continue to strengthen business fundamentals and mitigate tariff impacts by leveraging our brand strength to improve product mix and taking targeted measures to enhance contribution margins," Tata Motors said in a statement.

Profit before tax (PBT) for JLR came in at £351 million, down 49.4% YoY, due to tariffs and foreign exchange headwinds. Nevertheless, the company delivered its 11th consecutive profitable quarter and reaffirmed its FY26 EBIT margin guidance of 5–7%.

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In the commercial vehicle (CV) segment, revenue slipped 4.7% to Rs 17,000 crore, though EBITDA margins improved to 12.2% on better realizations and cost savings. Passenger vehicle (PV) revenue fell 8.2%, reflecting muted industry demand and product transition challenges.

On restructuring, Tata Motors confirmed that the demerger of its PV and CV businesses is progressing as planned. The NCLT’s final hearing has concluded, and the order is reserved, with the split expected to take effect from October 1.

Group CFO P.B. Balaji said the company will focus on strengthening fundamentals, offsetting tariff effects, and tapping festive season demand in the second half. Tata Motors’ shares fell 2.4% to Rs 630.80 on the NSE Thursday, extending year-to-date losses to almost 16%.

“Despite strong macro headwinds, we delivered a profitable quarter backed by solid fundamentals. As tariff clarity improves and festive demand builds, we aim to accelerate performance and regain momentum across our portfolio. With the demerger slated for October 2025, we are committed to a strong second-half showing,” Balaji said. He is set to become the first Indian to serve as CEO of JLR.

The PV business posted revenue of Rs 10,900 crore with an EBITDA margin of 4%. Wholesale volumes dropped 10% to 1,24,800 units, while EV sales declined 2.1% to 16,200 units. Tata Motors held a VAHAN registration market share of 12.3% and an EV market share of 36.7%.

The company said Q1 ended with positive momentum—Tiago and Altroz bookings rose 22% in June 2025, while the Harrier.ev launch was well received. Special editions of the Harrier and Safari were rolled out at competitive prices. July recorded the highest-ever monthly EV sales, marking a milestone in the company’s zero-emission push.

"Tata Motors is well placed to build on its new launches, including hatchbacks and SUVs, while sustaining EV growth. We are committed to improving profitability through aftersales transformation, technology adoption, and structural cost optimisation," the company stated.

On Thursday, Tata Motors’ shares closed 2.4% lower at ₹630.80 on the NSE, extending year-to-date losses to nearly 16%.