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Informist, Wednesday, May 13, 2026

 

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--Tata Motor: Entering FY27 with strong order from govt for buses
--CONTEXT: Comments by Tata Motors' mgmt in post-earnings analyst concall
--Tata Motor: Entire truck range now meets stringent European standards
--Tata Motor: Diesel prices remain key monitorable
--Tata Motor: April CV volumes remained healthy for industry
--Tata Motor: Cautious on rising commodity costs in near term
--Tata Motors: Diesel to have 30-50% share in total ownership costs
--Tata Motors: Priority is to rebuild market share for buses segment
--Tata Motors: Cos's first shipment for Indonesia order is already on sea
--Tata Motors: Robust rise in avg sale price in trucks on rise in vans' shr
--Tata Motors: Freight availability remains robust across segments
--Tata Motors: No shipments to West Asia in last two month
--Tata Motors: Intracity, inter-city bus demand to bring volumes
--Tata Motors: See capex for FY27 at 2-4% of revenue

 

By Gopika Balasubramanium and Prateem Rohanekar

 

MUMBAI – Diesel is the single largest operating cost for a transporter and hence a key element to watch out for in the financial year 2026-27 (Apr-Mar), top executives of Tata Motors Ltd. told analysts in a post-earnings conference call. The freight availability across segments and structural demand for commercial vehicles remains intact in India, the executives said, and the only hurdle is the uncertainty looming over fuel prices. They added that despatches of commercial vehicles are expected to grow in single digit in the June quarter. The management remains cautious on exports to West Asia and North Africa because of supply-chain disruptions induced by the war in West Asia.

 

"I think we are monitoring all the external factors, especially diesel prices, which will have significant impact on how the market pans out because diesel will have at least 30-50% impact on the total cost of ownership," a top Tata Motors executive told analysts. The company said the immediate challenge for the commercial vehicle industry is the trajectory of diesel prices and this has led some fleet owners to at times delay purchases towards the month-end, especially for heavy commercial vehicles. However, for customers looking to buy light commercial vehicles, the uncertainty on fuel prices is lower, the management said.

 

The company also remains cautious on rising commodity costs and depreciation of the rupee and sees them as "quite severe". Hence, it refrained from giving guidance for the margin. It was also firm about not passing on the full impact of rising costs to customers, fearing that would "destroy" the growing demand. Instead, the management said, it has increased cost-side measures to fight the rise in input costs. In April, the company had raised prices by 2%.

 

As for exports, Tata Motors has not sent any shipments to West Asia in the past two months and is trying to find alternative routes or logistics to ensure that its vehicles reach customers there. To tackle the fall in exports to West Asia, the company is working to increase volumes in other markets. The company said it does see some pressure in Sri Lanka, especially because of the reduced availability of fuel and increased prices.

 

To the company's relief, a large order from Indonesia has progressed well and the first shipment is already on the way. The company said it will ramp up deliveries for the same quite "rapidly". In February, the company had won an order to supply 70,000 vehicles for deployment in Indonesia. At present, the company sends its commercial vehicles to 30 countries across Europe, West Asia, South America, the South Asian Association for Regional Cooperation, Australia, and Africa.

 

Asked about the company's capital expenditure for FY27, the management said it would continue to be 2-4% of revenue, as in previous years. However, it refrained from giving guidance for FY27 on other metrics such as earnings before interest, tax, depreciation, and amortisation margin and performance of international markets.

 

The management, however, said it is entering FY27 with a robust order book from governments for the buses segment, which provides visibility for growth in volumes. Going ahead, the company will prioritise rebuilding its market share in this segment while maintaining profitability, it said.

 

As for electric buses, the company said it participated in two tenders recently and is promoting the use of electric buses by companies for their employees. Apart from this, Tata Motors is engaging some customers for intercity and intracity commutes, which it sees bringing in volumes. 

As for the trucks business, the company said the priority is to drive growth through variants having "model year 26" and higher payload variants. It also said the average selling price increased in the trucks segment on a year-on-year basis led by increase in volumes of vans in the portfolio. The company also said its entire fleet of trucks now meets stringent European regulatory standards. 

 

Back home, while replacement of trucks is happening, not many old trucks have been coming to the company's scrappage centres. The company said this may be because of its limited presence in just 11 locations. Without specifying the time period, the company said at least 40% of truck volumes is from large fleet owners replacing their vehicles. The company said it saw sustained demand and healthy volume growth in commercial vehicles in April. 

 

Tata Motors reported a net profit of INR 24.06 billion, up 70% on year, for the March quarter. The profit includes a one-time gain from a reversal of provisions made on account of the new labour codes. Without the one-time gain of INR 2.20 billion, the net profit would have been INR 21.86 billion. Its top line rose 22% on year to INR 244.52 billion. Wednesday, the company's shares closed at INR 384.25, down 0.7% from Tuesday, on the National Stock Exchange. Tata Motors declared its earnings after market hours.  End

 

Edited by Rajeev Pai

 

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