Tata Motors shares jumped as much as 6% to their day's high of ₹485 on the BSE after reporting exceptional first quarter results for FY27. The company's net profit surged 83% year-on-year to ₹2,560 crore, significantly higher than the ₹1,397 crore reported in the same period last year. Revenue from operations rose 19% YoY to ₹20,667 crore, up from ₹17,324 crore in the corresponding quarter of the previous financial year. The increase in net profit was primarily led by mark-to-market gains on investments in Tata Capital, as reported by the company post-market hours.
According to reports from Moneycontrol, Tata Motors has announced a 2% price increase across its entire commercial vehicle range, effective from January 2026. The auto major stated that this price adjustment is necessary to offset the impact of rising input costs, with the increase varying as per individual model and variant. The company had also implemented a 2.5% price hike in July to support margin improvement, as reported by multiple brokerages. CLSA noted that TMCV's Q1 EBITDA margin of 11.3% was around 50 basis points above consensus, with the brokerage maintaining an Outperform rating and target price of ₹596, implying 30% upside potential.
For the quarter under review, EBITDA rose to ₹2,300 crore, up 10% year-on-year, while the EBITDA margin stood at 10.9%, down 90 basis points due to increased operational expenses. The margin compression was attributed to commodity inflation, which had a negative impact of 340 basis points YoY, partly offset by operating leverage and price hikes contributing 140 basis points positively. CLSA expects TMCV to benefit from its focus on EVs and a strong export orderbook, with the 2.5% price hike taken in July supporting margin improvement efforts.
Multiple brokerages have responded positively to the strong Q1 performance. Nomura upgraded Tata Motors to Buy from Neutral and assigned a target price of ₹554 from ₹402, implying 21% upside from current levels. CLSA maintains an Outperform rating with ₹596 target price, while Motilal Oswal raised earnings estimates by 6% for FY27 and 2% for FY28 following the better-than-expected results. The company expects CV industry demand to remain robust with 2QFY27 volumes likely to post double-digit growth, supported by healthy underlying momentum and strong export orderbook.
As reported by Moneycontrol, Tata Motors has also announced the approval of a partial divestment of its equity shares in subsidiary Tata Technologies via an initial public offer (IPO). The company is experiencing strong domestic demand, rising EV adoption, and improving exports, which strengthens the growth outlook for the commercial vehicle segment. These positive market dynamics provide a foundation for the company's strategic pricing decisions and overall business performance in the commercial vehicle sector.
