TMCV’s Q1 net profit of ₹1,600 crore was driven by higher margins and higher other income. Analysts are now considering double-digit growth rates for revenue and profits in FY27.
The auto giant’s standalone revenue grew 23 per cent Y-o-Y to ₹19,400 crore, with 27 per cent volume growth Y-o-Y to 108,000 units. Operating profit margins contracted 80 basis points (bps) Y-o-Y to 11.7 per cent on rising costs; operating profit grew 16 per cent Y-o-Y to ₹2,260 crore. Other income grew by 77 per cent Y-o-Y to ₹316 crore. The company booked an exceptional loss of ₹100 crore on employee separation account. Adjusted net profit grew 13 per cent Y-o-Y to ₹1,600 crore.
The management said CV Vahan market share for TMCV improved by 100 bps in Q1, led by market share gains across most segments, except intermediate light and medium CVs (ILMCVs), where production was hit by supply constraints. The free cash flow generation stood at ₹1,110 crore in Q1 after investment spending of ₹550 crore, compared to a cash outflow of ₹1,800 crore in Q1FY26.
The company expects Q2 to see healthy double-digit Y-o-Y growth for the CV industry. However, growth trends from this September will need to be computed versus a higher base.
It expects continued pressure from commodities, particularly steel and rubber, in the near-term. TMCV announced price hikes of 2.5 per cent from July 1.
Regulatory approvals for the Iveco transaction are in the final stages, with only one pending approval remaining. All regulatory queries and requirements have been addressed, and the final clearance is expected by the end of August. The tender offer is expected to be launched in early September and is targeted to close by early November. This deal exposes it to global macro uncertainties. It will initially be funded with a debt of 3.8 billion euros.
The company strengthened its small commercial vehicles (SCVs) portfolio with the launch of multiple new products, including Ace Gold+ XL, Intra V40, and Intra EV, across ICE, CNG, and electric powertrains.
TMCV commenced deliveries for its Indonesia export order of 70,000 units, as part of its international expansion. It shipped 2,000 units in Q1, leading to 35 per cent Y-o-Y growth in export volumes. The EV penetration in small commercial vehicle and pick-up division (SCVPU) reached 10 per cent in May and June. SCV EV retail volumes stood at 3,200 units in Q1.
The company acquired an additional 18.1 per cent equity stake in Freight Tiger in May for ₹96 crore, increasing its total ownership to 63.6 per cent. The acquisition aims to integrate FleetEdge and Freight Tiger to create an end-to-end digital ecosystem across the value chain of truck and trip ecosystems.
TMCV reported a net cash position of ₹7,100 crore as of June in its standalone financials, after accounting for a dividend payout of ₹1,500 crore. Working capital requirements improved significantly to ₹230 crore in Q1FY27 from ₹3,500 crore in Q1FY26, supporting cash flow generation. The improvement was aided by operating performance, discipline in working capital management, and advance receipts from the Indonesia order.
In the buses and vans segment, TMCV secured orders for 562 units during Q1 across government, institutional, and state transport undertaking segments. The company has received orders for 850 electric buses. The parts and services business also recorded double-digit growth in Q1.
Other key focus areas for Q2 include managing commodity inflation, addressing supply chain constraints, accelerating truck growth, executing pending bus orders, and ramping up exports. TMCV expects to ramp up exports in non-West Asia markets.
In the truck segment, TMCV aims to accelerate growth through the MY26 product portfolio, higher-payload trucks, and expansion of its battery EV offerings. Acceptance of higher-payload trucks in the market has been encouraging, supporting market share gains. In the SCV segment, the company plans to build on the momentum of Ace and Intra platforms and leverage the EV transition to drive further market share gains.
The Intra Ace Pro EV offers an attractive total cost of ownership proposition and is seeing customer acceptance. EV financing trends are improving every month, supported by the offering of battery warranties beyond loan tenure. EV demand outlook is positive in the CV passenger segment, with additional tenders expected under the PM E-Bus Sewa initiative. Cell supply from China remains a bottleneck. The company expects supply constraints to ease by the end of Q2.
The writer is a New Delhi-based independent journalist
