India's Tata Motors posts sharp fall in quarterly profit on demerger, labour-code charge (updated)

Tata Motors

29/01/2026 11:31

Adds details of quarterly results, background from paragraph 3

Jan 29 (Reuters) - India's top commercial vehicle maker Tata Motors TATM.NS reported a 60.4% decline in quarterly profit on Thursday, hurt by one-time charges related to demerger costs and new labour codes, while revenue grew 20% on tax-cut-driven demand.

The truck and bus manufacturer reported a profit of 5.61 billion rupees ($61 million) for the quarter to December 31, down from 14.17 billion rupees a year earlier.

The company took a one-time hit of 15.45 billion rupees, with 9.62 billion rupees tied to demerger costs and 5.74 billion rupee impact from the labour codes.

Tata Motors split from the group's passenger vehicles arm TAMO.NS in October last year and made its trading debut as a separate entity in November.

Profit excluding taxes and the one-time charges jumped 45% to 23.18 billion rupees.

SALES GET TAX-CUT BOOST

Sales of commercial vehicles got a shot in the arm after India in late September cut taxes on such vehicles to 18% from 28% earlier.

Commercial vehicles are used for a wide range of activities, from construction and freight to public transport and mining. Lower prices helped fleet operators go for long-delayed replacement of older vehicles, analysts have said.

The tax cuts helped boost domestic sales of commercial vehicles by 22% during the December quarter, with Tata's rising 18%.

The company's overall sales grew 21% in the October-December period, boosting revenue to 203.15 billion rupees from 168.97 billion rupees the year before.

Demand is expected to strengthen in the fourth quarter across most segments, the company said in a press release.

Shares of the company closed 0.5% higher before the results.

($1 = 91.9980 Indian rupees)

 (Reporting by Nandan Mandayam in Bengaluru; Editing by Mrigank Dhaniwala)

 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))