New Delhi: Tata Motors Ltd, India’s largest commercial vehicle maker, expressed caution about the industry’s growth in FY27, saying the true impact of the West Asia war on fuel prices and consumer sentiment is yet to be seen.
The Mumbai company said it expects single-digit growth for the industry this fiscal year after retail sales grew 12% in FY26, crossing a million units for the first time as the goods and services tax (GST) cuts in September 2025 boosted consumer sentiment.
Management’s comments came after the company reported a 5% dip in consolidated net profit in FY26 to ₹3,030 crore on Wednesday evening. Without a ₹1,428-crore loss on investments due to its equity stake in Tata Capital, which was listed during the fiscal year, the company’s profit grew by 9% to ₹4,458 crore. Revenue grew 44% to ₹83,855 crore in FY26 on the back of 14% growth in domestic and international sales to 428,000 units.
Headwinds galore
Girish Wagh, managing director and chief executive at Tata Motors Ltd, cautioned on 13 May that the industry faces several headwinds, including potential fuel price hikes and their likely impact on consumer sentiment. “I think we need to be very, very agile and active in tracking how the market actually behaves. The April numbers have also shown healthy double-digit growth on a year-on-year basis,” Wagh said.
“I think the underlying demand drivers still continue to be pretty robust. We are still positive that we will see a single-digit growth for the entire year FY27. But, of course, I think since we have serious headwinds, this is something that we need to keep close track of,” he added.
The company’s note of caution for the commercial vehicle industry is significant as it is a bellwether for overall growth in the economy due to its role in transporting goods. Wagh noted that there are no signs of visible stress but diesel fuel price hikes will be important to monitor.
The commercial vehicle industry joins tractor companies in cutting growth rates compared to FY26 as firms brace for the impact of inflation caused by the West Asia war and expectations of a below-normal monsoon.
A strong growth environment in the first four months of 2026 helped the company make gains in the March quarter. Net profit increased by 35% to ₹1,793 crore while revenue soared by 19% to ₹26,098 crore.
Acquisition delayed
On Tata Motors' proposed acquisition of Italian commercial vehicle player Iveco for $4.4 billion, which was announced in July 2025, the company noted in its investor presentation that the transaction is expected to conclude by this September.
“Regulatory approvals for the proposed acquisition of Iveco are currently underway with most of the approvals already received. Last pending approvals are being actively pursued for the earliest closure,” the company said in its presentation.
Explaining the reasons for the delay, chief financial officer G.V. Ramanan said the company was working on getting financial regulatory approvals from Spain and France. “We have been pursuing it and there have been a lot of additional papers and questions that have been asked by the regulator, which have been furnished,” Ramanan said, adding that the delay will have implications for the company's plan to consolidate revenue of the Italian company.
“Our timeline was to complete the entire acquisition by Q1, so that starting Q2 the financial consolidation would begin. But given that now this is moving to Q2, we will have to wait for the transaction to consummate completely by around the middle or end of Q2,” the CFO added.
Tata Motors shares closed 0.72% down on Wednesday, with the results released after market hours. Nifty Auto declined 0.97% during the session.
