SYNOPSIS: Commercial vehicle demand strengthened in Q3 FY26, supporting revenue growth for both Tata Motors and Ashok Leyland. One delivered record revenue and profit, while the other saw a turnaround despite exceptional impacts, with improving volumes and market share gains.
FADA, the apex national body representing India’s auto retail industry, reports that January 2026 has delivered a strong, broad-based start to the calendar year, with total vehicle retail sales reaching 27,22,558 units, marking a 17.61 percent YoY growth.
The momentum was supported by sustained post-GST demand, healthy rural cash flows driven by harvest season and weddings, and steady traction across mobility and freight segments. Segment-wise, 2Ws grew 20.82 percent YoY, PVs rose 7.22 percent, CVs increased 15.07 percent, and tractors surged 22.89 percent, while 3Ws remained resilient with 18.8 percent growth.
CV sales stood at 1,07,486 units, up 15.07 percent YoY, reflecting improved freight activity and replacement demand. Growth was broad-based across tonnage categories, with light commercial vehicles (LCVs) at 65,505 units, up 14.94 percent, and heavy commercial vehicles (HCVs) at 34,287 units, up 14.61 percent. Dealer feedback suggests stronger goods movement, ongoing infrastructure activity, and renewed confidence among small fleet operators. Both urban (+13.94 percent) and rural (+16.25 percent) markets contributed to growth, underscoring widespread logistics demand beyond major cities.
With a market cap of Rs. 1.79 lakh crores, shares of Tata Motors Limited surged nearly 3 percent to close in the green at Rs. 487.1 on BSE. Tata Motors Limited, previously known as TML Commercial Vehicles Limited, is India’s largest and a globally renowned manufacturer of utility vehicles, pick-ups, trucks, and buses, with a global presence across South Korea, Africa, the Middle East, Latin America, Southeast Asia, and SAARC countries.
As per the Composite Scheme of Arrangement sanctioned by the NCLT, Mumbai Bench – amongst Tata Motors Limited, TML Commercial Vehicles Limited and Tata Motors Passenger Vehicles Limited – the company’s name was changed to Tata Motors Limited from TML Commercial Vehicles Limited (effective 29th October 2025), and its equity shares are listed on the BSE and NSE.
Meanwhile, shares of Ashok Leyland Limited moved down by nearly 2 percent on BSE to close in the red at Rs. 206.25 on Wednesday, with a market cap of Rs. 1.21 lakh crores.
Ashok Leyland Limited, one of the leading commercial vehicle manufacturers in India, is primarily engaged in the business of manufacturing and selling a wide range of CVs, along with manufacturing engines for industrial and marine applications, forgings and castings.
Ashok Leyland is an Indian multinational automotive manufacturer based in Chennai and serves as the Indian flagship of the Hinduja Group. The company serves a diverse customer segment, including commercial fleet operators, retail customers, government agencies, the industrial sector, defence and special application vehicles.
Financials
For Q3 FY26, Tata Motors CV segment reported a consolidated revenue from operations of Rs. 21,847 crores, reflecting around 18 percent QoQ growth compared to Rs. 18,585 crores in Q2 FY26, and a year-on-year increase of around 16 percent from Rs. 18,819 crores recorded in Q3 FY25.
Net profit stood at Rs. 705 crores, marking a sharp turnaround from a loss of Rs. 867 crores in Q2 FY26. However, on a year-on-year basis, profit declined by nearly 48 percent from Rs. 1,355 crores reported in Q3 FY25.
The quarter included exceptional impacts arising from the implementation of the New Labour Code (Rs. 603 crores), demerger-related adjustments (Rs. 962 crores), and acquisition costs (Rs. 82 crores). The cumulative impact of these and other items amounted to around Rs. 1,500 crores at the standalone level and ~Rs. 1,600 crores on a consolidated basis.
As of 31st December 2025, the company remained net cash positive at around Rs. 6,100 crores. This figure includes TMF Holdings’ net debt of its investments in Tata Capital Limited.
Meanwhile, for Q3 FY26, Ashok Leyland reported its highest-ever quarterly revenue from operations of Rs. 14,830.24 crores, reflecting a sequential growth of around 18 percent QoQ compared to Rs. 12,576.86 crores in Q2 FY26, as well as an increase of around 24 percent YoY from Rs. 11,995.2 crores recorded in Q3 FY25.
Net profit also reached an all-time high of Rs. 862 crores, rising by around 5 percent on both a sequential and year-on-year basis, compared to Rs. 819.67 crores reported in Q2 FY26 and Q3 FY25. The company further reported an increase in net cash to Rs. 2,619 crores at the end of the quarter, compared to net cash of Rs. 958 crores in Q3 FY25.
Business Highlights
In Q3 FY26, the CV segment reported wholesales of 116.8K units, reflecting a strong growth of around 20 percent YoY. Domestic volumes increased by 18 percent YoY, while exports recorded a sharp 70 percent YoY growth. Tata Motors’ overall domestic CV market share, based on VAHAN data, expanded by 100 bps sequentially to 35.5 percent for Q3 FY26.
Looking ahead, management expects demand to strengthen further in Q4 FY26 across most CV segments. The outlook remains supported by continued government-led infrastructure spending and expansion in key end-use industries, which are likely to drive industry momentum in 2026. Backed by a streamlined product portfolio, calibrated pricing strategy, and deeper customer engagement initiatives, the company believes it is well-positioned to capitalise on emerging demand opportunities.
For Ashok Leyland, Medium and Heavy Commercial Vehicle (MHCV) volumes stood at 32,929 units in Q3 FY26, up 23 percent compared to 26,692 units in Q3 FY25. This outpaced overall industry growth, resulting in market share gains. LCV volumes came in at 20,518 units, up 30 percent from 15,754 units in the year-ago quarter, again exceeding industry growth and supporting further share gains. Export volumes also improved to 4,965 units, reflecting a 20 percent YoY increase from 4,151 units.
The company’s domestic MHCV market share remained above 30 percent, while it continued to maintain market leadership in the Bus segment with a 40 percent market share in Q3 FY26.
According to the MD & CEO Mr. Shenu Agarwal, the management remains optimistic about the medium- to long-term prospects of the CV industry, supported by favourable macroeconomic conditions and improving customer sentiment. The strategy continues to focus on profitable growth through product premiumisation, structural cost efficiency, expanded service coverage, and diversification into non-CV businesses.
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