Tata Motors Limited has delivered a strong Q3 FY26 performance, demonstrating robust growth across all business segments. The commercial vehicle manufacturer reported significant improvements in revenue, volumes, and profitability metrics during its earnings call held on January 29, 2026.

Financial Performance Highlights

The company's Q3 FY26 financial metrics showcase strong operational performance across key parameters:

Volume Growth Across All Segments

Tata Motors achieved impressive volume growth of 20% year-on-year, reaching 116,800 units in Q3 FY26. All product categories registered double-digit growth:

Product Portfolio Expansion

The company launched 17 new trucks during the quarter, including five electric vehicles across the 7-ton to 55-ton range. Key launches included the Azura series for the ILMCV segment (7-19 tons) and trucks meeting European safety standards R29 03. These launches are built on the Intelligent Modular Electric Vehicle architecture, featuring modular battery packs and in-house battery management systems.

Market Position and Outlook

Tata Motors witnessed a 100 basis points market share recovery from Q2 to Q3, primarily driven by strong performance in heavy commercial vehicles. The company's Fleet Edge digital platform now covers over 1 million installations, providing valuable utilization data showing improved freight rates of 2-5% post GST 2.0 implementation.

Managing Director and CEO Girish Wagh highlighted strong momentum continuing into Q4, supported by improved fleet utilization, infrastructure activity recovery post-monsoon, and government tender wins totaling 6,000 bus units. The company expects sustained growth driven by consumption expansion and infrastructure investments.

Financial Strength and Future Investments

The company maintained a strong balance sheet with net cash of ₹3,900 crores on standalone basis and ₹6,100 crores on consolidated basis. Investment expenditure of ₹2,000 crores remained consistent with earlier guidance, while Return on Capital Employed reached 53% as of December 2025. The Iveco acquisition is progressing as planned with regulatory approvals expected by March 2026 and deal finalization targeted for Q1 FY27.

Tata Motors Limited has announced board approval for a comprehensive merger plan involving two of its wholly owned subsidiaries, marking a significant step toward corporate structure simplification. The board of directors approved the Composite Scheme of Amalgamation on January 29, 2026, following recommendations from the Audit Committee.

Merger Details and Structure

The approved scheme involves the amalgamation of TMF Holdings Limited and TMF Business Services Limited with Tata Motors Limited under Sections 230 to 232 of the Companies Act, 2013. The merger will consolidate these entities into a single corporate structure, with both subsidiaries being dissolved without winding up proceedings.

*As per audited standalone financial statements for the year ended March 31, 2025

Business Operations of Merging Entities

The three companies operate in distinct but complementary business areas. Tata Motors Limited focuses on manufacturing commercial vehicles, while TMF Holdings Limited operates as an NBFC – Core Investment Company registered with the Reserve Bank of India, engaged in investing, granting loans, guarantees and other forms of finance to subsidiaries and group companies. TMF Business Services Limited specializes in operating leases business.

Strategic Rationale and Benefits

The proposed amalgamation is designed to deliver multiple operational and financial advantages:

• Structure Rationalization: Reducing the number of legal entities to decrease structural complexity and enable more efficient management
• Cost Optimization: Eliminating administrative duplications and reducing associated costs of maintaining separate entities
• Operational Efficiency: Streamlining business operations under a unified corporate structure

Financial and Regulatory Framework

The merger will proceed without any cash consideration or share exchange. The entire paid-up share capital of both subsidiaries will be cancelled, and no new equity shares will be issued by Tata Motors. The company's shareholding pattern will remain unchanged following the scheme's implementation.

Regarding regulatory compliance, the transaction falls under related party arrangements since both entities are wholly owned subsidiaries. However, the merger is exempt from certain regulatory requirements under the MCA Circular dated July 17, 2014, and SEBI Listing Regulations 23(5)(b).

Approval Process and Timeline

The scheme requires comprehensive regulatory clearances including approvals from shareholders, creditors, the National Company Law Tribunal, BSE Limited, National Stock Exchange of India Limited, and other statutory authorities. The implementation will proceed under the Companies Act, 2013, Income-tax Act, 1961, and other applicable laws.

Under SEBI regulations, the requirement for "No Objection Letter" from stock exchanges is not applicable for schemes involving merger of wholly owned subsidiaries with holding companies. However, Tata Motors and TMF Holdings Limited will file the scheme with stock exchanges for regulatory compliance and public dissemination.