Tata Motors Q1 Preview: Net profit to fall over 30% as JLR feels heat from Trump tariffs, weaker margins

Tata Motors' share price has slipped nearly 12 percent since the beginning of the year.

Mumbai-headquartered Tata Motors Limited is set to release its earnings report for the first fiscal quarter of FY26 on August 8. Analysts expect a drop in revenue amid a slowdown in volumes, a dip in passenger vehicle and JLR business. Margins will also likely face pressure due to weak operating leverage.

According to a Moneycontrol poll of six brokerage firms, the Nexon maker is anticipated to record an 8.7 percent year-on-year decrease in revenue, reaching Rs 98,600 crore. Net profit is projected to witness a massive plunge of about 33.5 percent to Rs 3,672 crore from Rs 5,523 crore in the same quarter of the previous fiscal year.

Earnings estimates from analysts polled by Moneycontrol are in a diverse range, indicating that any positive or negative surprises could trigger a sharp reaction in the stock price.

What factors could affect Tata Motors' earnings?

Domestic volumes fall: The domestic revenue is expected to take a hit due to a sharp 6 percent decrease in volumes and a flat average selling price year-on-year. The company sold 85,206 vehicles during the quarter, lower than the 91,209 units sold in the same quarter of the previous year.

JLR revenue growth to slow: The company’s British arm, Jaguar Land Rover (JLR), is expected to report a 12 percent year-on-year decline in volumes for the first quarter of FY26, excluding the China joint venture. The drop is largely attributed to subdued demand in the US market, where the imposition of Trump-era tariffs has dampened buyer sentiment.

EBITDA Contraction: Consolidated margins are expected to decline year-on-year by about 390 basis points. This decline will likely be driven by a combination of factors: negative operating leverage due to lower volumes, increased tariff-related costs on US sales, and adverse foreign exchange impact arising from the appreciation of the British pound against the US dollar.

What to look out for in the quarterly show?

Investors will watch for updates on JLR’s FY26 guidance, progress on cost-control initiatives, demand and discounting trends in key markets, as well as volume and market-share trajectory. Clarity on the new-model launch schedule and the phase-out plan for Jaguar models will also be key.

On the India front, the company’s FY26 volume growth expectations for commercial vehicles (CVs), current and expected discounting trends, and market-share targets for the passenger vehicle (PV) segment will be in focus. Commentary on the demand outlook for CVs and PVs, the competitive landscape, and upcoming EV models and their timeline will be closely tracked.

Shares of the company closed at Rs 653, lower by 0.3 percent from the last close on the NSE. Tata Motors' share price has slipped nearly 12 percent since the beginning of the year.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.