Tata Motors enters FY26 on the back of a defining year. From record profitability and cash generation in FY25 to strategic trade tailwinds and a compelling product pipeline, the vehicle maker appears well-positioned to ride out macroeconomic uncertainties. Whether it is JLR’s continued transformation, the CV business’s structural strength, or the PV segment’s upcoming product wave, Tata Motors is leveraging strong fundamentals to remain on course, P B Balaji, Group CFO, Tata Motors, he said.
At a media briefing, Balaji said that as the global automotive industry continues to grapple with economic volatility, shifting trade policies, and geopolitical uncertainty, Tata Motors has emerged from FY25 with stability intact and strategic focus strengthened.
With record financial performance, a robust product pipeline, and a sharp focus on cost control and customer value, the company has laid out a confident roadmap for FY26. From the UK and US trade negotiations to India’s domestic market dynamics, the vehicle maker is steering with agility and strategic foresight.
Trade Tariff Realignments – Advantage JLR
The recent announcement of tariff reductions under the US-UK trade agreement, slashing import duties from 27.5% to 10%, was welcomed by Tata Motors. Although the fine print around timelines and applicability remains pending, the move has infused a note of optimism, particularly for JLR, which has long navigated high import barriers in key markets. Similarly, the India-UK Free Trade Agreement (FTA), while yet to be enforced, is expected to positively impact future JLR imports by offering quicker market access and global pricing benefits, he mentioned.
In India, models such as Range Rover Sport, Evoque, and Velar are already manufactured under CKD operations and thus will remain unaffected by the FTA. But for upcoming nameplates and premium global offerings, the policy alignment signals long-term strategic upside.
Steady Ascent Amid Global Flux
Jaguar Land Rover continues its resurgence with FY25 delivering record annual and quarterly profits. A prudent mix of product focus, cost rationalisation, and disciplined capital allocation ensured that investments remained entirely funded by operating cash flows. Despite waiting on full clarity around tariffs, JLR remains committed to its product and electrification roadmap, with the Range Rover Electric and Jaguar Type 00 (a concept car first revealed in December 2024 at Miami Art Week) poised to capture future luxury demand.
While deferring granular FY26 guidance until Investor Day, he remain confident in JLR's momentum and transformation.
Commercial Vehicles - Ready To Roar
The CV business of Tata Motors witnessed a modest decline in volumes during FY25, but more importantly, it delivered a rare feat—profitability improvement amidst market softness. The segment posted a strong ROCE of over 40%, with EBITDA margins touching 12%. This resilience, he claimed, marks a structural shift in how the business is being run.
Investments in infrastructure, stable interest rates, and easing input costs signal a positive outlook for FY26. Growth is expected to rebound, especially in the HCV segment, while attention remains sharply focused on revitalising the SCV portfolio. If demand recovers as expected, the CV business is poised to 'turbocharge,' buoyed by its leaner structure and stronger fundamentals, he mentioned.
Passenger Vehicles
Dwelling up on the passenger vehicles, he said the segment saw a 13% YoY decline in EV volumes, primarily due to lower fleet orders. However, the retail market showed signs of resurgence toward the end of FY25, and Tata Motors is entering FY26 with bullish intent. The company is gearing up for a major product onslaught—the launch of the Sierra, Punch refresh, petrol Harrier and Safari, and the recently launched updated Altroz—all targeted to regain momentum and expand market share.
EV growth, although dented in FY25, remains central to the strategy. A renewed push is expected through expanded offerings, improved infrastructure, and ecosystem partnerships. Additionally, the Agratas battery plant in India and the UK remains on track, although there are capacity recalibrations underway, he explained.
Balancing Growth With Prudence
FY25 saw record investments by Tata Motors, exceeding INR 48,000 crore. Yet, the company managed to become net cash positive, which, according to Balaji, is “a rare accomplishment” that underscores its financial discipline. With no major increase planned for FY26 capex, the focus will remain on executing high-ROI projects and funding innovation internally.
The company has also reaffirmed its commitment to sustaining double-digit EBITDA margins and maintaining healthy returns across all businesses. The demerger of commercial and passenger vehicle businesses, now underway, is expected to offer even sharper strategic focus going forward.
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Tata Motors Hits Peak Performance In FY25 Amid Global Headwinds