Tata Motors Reports ₹867 Crore Consolidated Net Loss

Tata Motors Ltd reported a consolidated net loss of ₹867 crore for the quarter that ended on 30 September 2025, compared with a profit of ₹498 crore in the same period a year ago. At the same time, revenue from operations increased by around 6% year-over-year to approximately ₹18,585 crore. Why did the company swing back into the red despite higher revenue, and what should investors watch going ahead?

What Drove the Loss Despite Higher Revenue?

Revenue improved from about ₹17,535 crore in Q2 FY25 to ~₹18,585 crore in Q2 FY26 (+6 %). The increase was driven by approximately 9% growth in domestic volumes and a strong showing in exports (75% growth) for the commercial vehicle (CV) business.

But the company posted a loss because of two major headwinds:

• A fair-value loss of ~₹2,027 crore on the investment in Tata Capital Limited, booked as “equity investments measured at fair value through profit and loss (FVTPL)”.
• A sharp rise in expenses: total costs jumped more than 15% to around ₹19,296 crore from ~₹16,777 crore a year ago.

Essentially, the business sold more vehicles, but investment losses and cost pressure outweighed the benefit, resulting in a net loss.

How Does This Set Up the Outlook?

With the loss behind it, Tata Motors now needs to demonstrate that its core business is back on a stable footing. The company is banking on several levers to improve performance:

• It anticipates improved demand in H2 FY26 from construction, infrastructure and mining activity, which would benefit CV volumes.
• It claims to be net cash positive at around ₹1,200 crore as of September 30, 2025, which may give it flexibility.
• The acquisition of the Iveco Group is expected to close in April 2026, targeting a combined top line of USD 24 billion.

For investors, key items to monitor include:

• Whether EBITDA margins recover and move toward double digits, as the company targets.
• How the fair-value losses behave, if one-time investment markdowns continue, they may keep profits volatile.
• The volume growth is sustained beyond the one-off benefits of GST reform and festive demand.
• Execution of the Iveco acquisition and how it influences cost, scale and debt.

What Are the Risks and Opportunities Ahead?

Risks:

• If investment markdowns persist, profits may remain weak despite an improvement in core business.
• Inflation in material costs or supply chain disruption could erode margins.
• External shocks (e.g., export market slowdown or regulatory change) could impact growth.

Opportunities:

• A strong second half could signal a return to profitability and enhanced investor confidence.
  
• Successfully integrating Iveco could deliver synergies and boost scale.
  
• A healthy volume uptick in infrastructure-led demand could mean premium pricing and higher margins.
  So, where does this leave investors in Tata Motors?

Conclusion

Tata Motors’ Q2 result, a net loss of ₹867 crore despite revenue of ~₹18,585 crore, reflects a business in transition. The revenue gain is real, but investment losses and cost pressures weighed heavily on the company. Going ahead, the company must demonstrate that its core operations are sustainable and that one-time losses do not become the norm. Will the business bounce back in H2 FY26 and deliver consistent profit ahead of the Iveco deal, or will volatility remain high and investor patience be tested?

References

The Economic Times
Business Standard
The Financial Express
Outlook Business