The investor relations team. Before we begin, I would like to inform you that our CFO, Mr. G. V. Ramanan, is unable to join today's call due to a personal exigency in the family. He sends his regrets for being unable to attend. In his absence, I will be taking you through the financial highlights section of the presentation, following which Mr. Wagh will give the business and strategic overview. We will then move to Q&A. As a reminder, all participants will be in listen-only mode. We will be taking your questions via the Teams platform. It is already open to you for submitting questions. Please mention your name and the name of your organization when submitting your questions. With that, let me begin with the presentation highlights for the quarter. Before we go into the numbers, a quick word on safe harbor.
Consistent with our last quarter presentation, our primary numbers represent the standalone financials, which includes joint operations with Tata Motors. Consolidated results follow later in the deck. One change to note this quarter, Freight Tiger is now included as a subsidiary following the increase in our stake in May 2026. With that, let me take you through the highlights for the quarter. Q1 was a quarter of execution on the commitments we made at the start of the year. A few highlights that deserve a mention. On electric vehicles, we strengthened our electric CV leadership with over 3,400 electric vehicle orders across segments, building on the momentum we saw in the second half of last year. On the SCV pickup front, we launched the Ace Gold+ XL, Intra V40, and Intra EV, broadening the SCV pickup portfolio across ICE, CNG, and electric.
For the Indonesia order of 70,000 units of Yodha and Ultra T.7, we initiated deliveries during the quarter. We also crossed a major milestone, with our Lucknow plant crossing 1,000,000 commercial vehicles in cumulative production. We also partnered with HPCL on a scalable circular economy model for used automotive lubricants. The Tata Motors Foundation's Integrated Village Development Programme has now reached close to 200 villages nationwide. Next slide, please. There were two significant corporate actions in the quarter. On the Iveco transaction, regulatory approvals are now in the final stage with only one approval pending. All information requests have been addressed, and we expect a final clearance by the end of August 2026. On that basis, the tender offer is expected to be launched in early September 2026, with closure expected by early November 2026.
On Freight Tiger, we acquired an additional 18.1% equity stake in May 2026 for around INR 96 crores, taking our total holding to approximately 63.6%. Freight Tiger is now a subsidiary. The intent here is straightforward. We are bringing Tata Motors and Freight Tiger together so that it gives us an end-to-end digital ecosystem across the logistics value chain, covering both the trucks ecosystem and the trip ecosystem. The next few slides cover the standalone business, which includes JV with Tata Motors. Let me start with the volumes. Q1 wholesales were approximately 108,700 units, up 26% year-on-year. A robust quarter and one delivered through a period of heightened geopolitical tensions. It is important to note that this growth was broad-based across every product line and each in double digits.
HCV at 26,400 units, up 22%, ILMCV at 17,100 units, up 16%, SCV pickup at 38,300 units, up 35%, SCV passenger at 18,700 units, up 23%, and exports at 8,100 units, up 35%. This slide summarizes the standalone financials. The volume momentum we saw on the last page translated into a 23% revenue growth for the quarter. It stood at INR 19,300 crores. EBITDA was INR 2,300 crores at a margin of 11.7%, down 60 basis points year-over-year. This moderation is mainly commodity-led, and I will take you through the walk on the next slide. EBIT margin was 9.4%, down only 20 basis points, and PBT before exceptional items was INR 2,100 crores, up 26% YoY. Despite the margin moderation, absolute profit growth has kept pace with revenue. Free cash flow was INR 1,100 crores against a - INR 1,800 crores in Q1 last year.
That's a swing of almost INR 2,900 crores. I will also cover the drivers for that shortly. Net cash stood at INR 7,100 crores as of June 30th, against INR 7,500 crores at March end, and this is after the INR 1,473 crores dividend payout during the quarter. ROCE continued to be strong at 68% on a trailing 12-month basis, against 72% for FY 2026. Investment spending, INR 500 crores for the quarter, was in line with plan.
This is the walk from PBT before exceptional items of INR 1,635 crores in Q1 of FY 2026 to INR 2,057 crores in Q1 of FY 2027. What you see below that is the EBIT margin bridge. Volume and mix contributed to INR 636 crores and realization was a further INR 402 crores. The price increases that we took during the quarter have largely been passed through and together these added 140 basis points to EBIT margin.
Variable costs were the principal headwind at INR 649 crore or 340 basis points. This is primarily commodity inflation, steel, aluminum, and copper all flowing through into material cost, consistent with the headwinds that we flagged when we closed FY 2026. Other fixed costs contributed positively at 180 basis points. This is operating leverage on a larger revenue base. Effects on other items were neutral to margin. Net of all this, EBIT margin moved from 9.6% to 9.4%, and in summary, operating leverage and improved realizations have absorbed almost all of the significant commodity headwind. Coming to free cash flow for the quarter. FCF was INR 1,114 crores against a negative of INR 1,796 crore in Q1 of FY 2026, a swing of about INR 2,900 crore. Going through the walk, PBT before exceptional items of INR 2,057 crore. Non-cash items were INR 247 crore.
On tax, the INR 500 crore outflow compares with just INR 20 crore in Q1 of last year. As flagged during the full-year results, cash tax is now a recurring item for us. With that, we arrive at a cash tax of around INR 1,800 crores. CapEx, roughly about INR 554 crore, lower than the INR 639 crore in Q1 of last year, but in line with our investment plan. But the decisive difference year-on-year is efficient working capital. This quarter consumed only INR 232 crore as against INR 3,474 crore in Q1 of FY 2026. Next slide. Total investment spending in Q1 was INR 515 crores. At approximately 2.7% of revenue, this sits comfortably within our guided range of 2%- 4%. This completes the standalone numbers. Now let me turn to the consolidated results. Consolidated revenue for Q1 was INR 20,700 crores, up 19% YoY.
EBITDA was INR 2,300 crore at 10.9%, down 90 basis points, and EBIT was 8.5%, down 80 basis points. This was due to the same commodity dynamic that we discussed at the standalone level. PBT before exceptional items was INR 3,000 crore, up 81%. This includes a mark-to-market adjustment on our investments in Tata Capital. Consolidated free cash flow was INR 400 crore against a negative of INR 2,000 crore in Q1 of FY 2026, and net cash stood at INR 13,500 crore as on June 30th, as against INR 13,700 crore at March end, maintaining a strong liquidity position through the quarter. With that, let me hand over to Girish to take you through the business updates. Over to you, sir.
Thank you, Sneha. Let me begin with the vehicle share, the registration share. We saw 100 basis points improvement in the vehicle share on a sequential basis. As compared to FY 2026, there was a growth of 170 basis points. We further strengthened the position in heavy commercial vehicles to 56.3. ILMCV saw a slight drop essentially due to the supply chain challenges that we have seen, especially in the Western zone. We also had 110 basis points growth in vehicle share in small commercial vehicles and around 490 basis points growth in three-wheel passenger, which is buses and vans. This is on the back of the tenders that we have won. Moving on. As far as fleet utilization is concerned, this is our data from the Fleet Edge that we have deployed now almost on 1.2 million vehicles.
The fleet utilization improved month-over-month in Q1. It improved from April to May to June. But the Q1 fleet utilization remained slightly below that of Q1 of last year. This is also on the back of a very high volume which was sold in H2 of last year. It is just slightly below that of Q1 of last year and not a concern at this juncture. But what remains healthy is the significant growth in e-way bills as well as diesel consumption, which shows the continuous growth in utilization of the vehicles and the freight which is available for transportation. Moving on. The industry saw healthy momentum with the wholesale volume growing almost 18% on a YoY basis and our volumes grew by around 26% in the same period.
As I spoke on the earlier slide, e-way bill generation shows a very good growth of 12.4%, which does indicate healthy freight available for transportation. Fleet utilizations improved month-over-month. Although Q1 FY 2027 is slightly below that of Q1 FY 2026. And diesel consumption also grew. Overall, positive markers for the industry. Our businesses, starting with trucks, we have a YoY market share gain due to volume growth, especially in heavy commercial vehicles on the back of the new product launches that we spoke earlier. In buses and vans, healthy market share growth driven by not just higher retails in all segments, but also delivery on the government tenders that we had won in the previous quarters. During the quarter gone by, we also won orders for 562 units across multiple segments.
In small commercial vehicle, we did launch new products, which were spoken in the first few slides. In addition to that, the ramp-up in our Ace Gold Diesel LNT and Ace Pro EV are supporting the volume growth. Intra brand continues to do well, and Intra EV has also been launched and has started doing well. Of course, currently, we do have some supply chain challenges, especially on Intra EV. The parts and services business continued to grow in double digits. Strong growth trajectory. I think we were able to maintain uninterrupted diesel exhaust fluid supplies despite the crisis that we had in terms of availability of technical-grade urea due to the Middle East crisis. This also led to, therefore, increase in the volume and revenue from DEF supplies in Q1.
Fleet Edge's now installed base grew to more than 1 million vehicles, and the subscription renewal performance has improved dramatically on a YoY basis. In the international business, we initiated deliveries against the Indonesia order, and we had around 2,000 vehicles being shipped in Q1. Post that, we have been ramping it up consistently. We've been able to demonstrate a 35% YoY growth despite very few numbers being shipped to Middle East. On sustainability, and the EV business, with the launch of Intra EV and also the 55 ton EV tractor, and the increase in diesel prices which happened in middle of the last quarter, we have seen the TCO parity of EV with respect to diesel and the gas vehicles is being reached a year and therefore they are becoming more attractive.
As a result, the EV volumes grew almost three times on a YoY basis. In fact, in SCV pickup, the EV penetration reached double digit in the months of both May and June, and that continues to improve further as we get into Q2. Therefore, we had more than 3,200 retails on SCV EVs in Q1, which alone is almost four times growth on a YoY basis. On EV trucks, both, I mean, the heavy commercial vehicle tractors and tippers, there is a very strong interest from the customer, robust engagement, and the customers are looking forward for these kind of decarbonizing solutions. We also now have around more than 850 electric buses orders. This is a combination of orders from private customers as well as a few tenders that we won. Tenders from Chennai, Ahmedabad, Hyderabad, and the state of Odisha.
Our smart city business, which operates electric buses, has now covered more than 59 crore kilometers and maintains the spotless performance in terms of uptime and safety. Moving on. As we look ahead for Q2, for the overall business, I think two things we have to manage actively. First is the commodity inflation, which continues to be there, which will be managed through, of course, first line of attack is cost management, but we've also taken a price increase on 1st of July. In addition to that, we've also seen some supply chain challenges, especially due to increase in demand in almost all the auto segments, be it two-wheeler, three-wheeler, four-wheeler, commercial vehicles, tractors. I think we have seen healthy growth all across. As a result of which some of the part categories like sheet metal, casting, forging, have become a constraint.
To address this, a lot of debottlenecking actions have been taken place. Few more in the pipeline, but this has already enabled us to improve the throughput towards the end of Q1, and of course, in Q2. On the demand generation side, trucks, we will continue to accelerate the growth through the new MY 2026 portfolio, the higher payload trucks and, of course, with heightened interest in the battery electric vehicles. EV passenger, we still have around 4,500 government orders on hand, which we will continue to deliver during this quarter. As I spoke, there are 850 e-buses orders also on hand. In small commercial vehicle, we will build on the demand which is being seen for both the Ace and Intra brand families, and also build on the shift which is happening towards EVs and build on the market share gain.
In parts and services, we continue to bring in innovative offerings, especially on services, which leads to improved demand, not only for the products, but also for the parts. We are also taking quite a few actions on supply chain, some debottlenecking, and also the fulfillment chain, which will improve our delivery of parts to the customers. On international business, we will continue to leverage increased demand from non-Middle East markets, especially in SAARC, sub-Saharan Africa, and also increase the throughput towards Indonesia. That's the plan for the quarter ahead or the quarter that we are already into. Now over to you for the questions.
Thank you. We have a few questions which have come in already in the queue. The first one is from Raghu. Congratulations, Raghu from Nuvama. For full-year, do you expect double-digit growth in domestic CVs? Second question on exports, how do you see the full-year outlook for Indonesia order? How do you see dispatches in FY 2027 and 2028?
Thank you, Raghu. I think very early to talk about H2. It appears that Q2 will also see a healthy double-digit YoY growth. I think it will be very interesting to see how the market pans out from September onwards, especially when we do a YoY comparison. Because last year, as we recollect, post the GST rate correction, the market really picked up from the month of September. I think the kind of growth that we have seen in July, it will probably be safe to say that Q2 will end up with a double-digit growth. Now coming to Indonesia, I think we are ramping up the supplies quite significantly. Yes, I can only say that the 70,000 orders will certainly be supplied over a period of two years, FY 2027 and FY 2028. Kapil?
Yeah. The next question from Kapil. Kapil is also asking about demand outlook, which I think you just addressed. On EVs, what is the EV demand outlook? How is the response been to Intra EV and what is our capacity? Cost, is there more cost pressure ahead? Will the price hike in Q2 cover it?
Yeah, I can see.
Yeah. Again, Indonesia order is something which we have already answered, so maybe you can take these two.
On EV, as I said, Kapil, first of all, thank you. On EV, yes, the demand outlook is quite positive. I already gave you the number of orders that we have for the electric buses. In addition to that, I think as a part of PM-eBus Sewa, there are a few more newer tenders which are also on the way. So we are quite positive on that. Intra EV pickup, which is completely in the retail market, is in fact doing very well. As I said, the TCO parity of Intra and Ace Pro has become very attractive with respect to or in comparison to their ICE brothers. Therefore, from that perspective, I think the demand will remain strong and will continue to grow. In terms of capacity of Intra EV, actually, our in-house capacity is not a challenge at all.
What has happened is not only our electric vehicle demand has gone up, which is leading to a, therefore, cascading increase in demand of cells from China. But even within China, share of electric vehicles has further gone up, which has led to increased demand on the cells. This is something which is currently a bottleneck and the lead time for the demand or lead time for getting the cells in India and converting into batteries is currently pretty high. But I think we have placed higher set of orders already around two months back. But towards the end of this quarter, I think we should have the supplies completely debottleneck from the perspective of the demand as we see. Now coming to costs, is there more cost pressure ahead?
Yes, there is further cost pressure ahead of us, in terms of few of the commodities, steel, rubber, et cetera. It is our endeavor, of course, to ensure that the price hike and our own internal cost management actions enable us to tide over this tough commodity challenge. The net price hike in July, so Kapil, we have taken 2.5% increase and very confident that it should pass through as we progress during the quarter. On Indonesia order, I think we have already answered in detail, so we can move to the next question.
Yeah. The next, again from Raghu. On e- trucks sales, how is profitability different from the ICE trucks, and how much is the EV revenue and PLI for the quarter?
So there is another question in terms of higher payload trucks.
Okay.
Okay, Raghu, there is one question from you in terms of higher payload trucks. Yes, I think the acceptance in the market is very good, and this is therefore leading to market share gains gradually. Let me say, because you have asked a question whether it is giving a double whammy of market share gain and contribution margin improvement. I think in commercial vehicles, the customers do take time to build the trust in the vehicle, although they have a trust in the brand. For any new vehicle, I think they kind of watch as to what is happening. At this juncture, I must say that yes, it does make a positive business case for them, these new high payload trucks. The next question you have asked is utilization for HCV tipper is relatively lower than HCV cargo. Is there any worries? No.
Raghu, this is quite characteristic. From the beginning of rainy season, the tipper utilization does go down, and towards middle of September it starts picking up again. In many cases it also starts picking up from 15,000s, so it depends on the rainfall activity. This is not something to be concerned about. You asked about the growth in other expenses is much lower than the revenue growth. That is the operating leverage, Raghu, and we will make all the efforts to get this leverage as we go ahead. There was one more question you said, what, from him?
Yeah, on E truck sales. How is profitability different from ICE trucks?
Yeah. See, this is something that I have also addressed during our Investor Day, that first is our endeavor is to sell all the vehicles with PLI benefits. Although I must add that off late, the regulators are taking pretty long time in giving the certificates, and therefore in specific cases to meet customer commitments, I think we have started delivering the vehicles in certain cases. Otherwise our endeavor is to deliver with full PLI. The profitability will be different from ICE trucks because the scale is pretty low. But I think as the scale improves and we have higher localization, and I think in some quarters from now, we should see even cell localization happening gradually. With that, I think we should get back into a good position, Raghu.
We have a few questions on email. This one is from Pramod Kumar, UBS. Says, "Congratulations, team on the strong volume and profit performance." Question is, on the pricing environment, are we reaching the limit for price hikes given the sharp surge in steel and rubber, and how is the discounting been across segments?
I think this is a very delicate balance that we have to achieve, and this is something that I said in Q1 also, that our first line of attack is to see how much cost we can contain, how much cost we can negate. Beyond that, I think we have no option but to increase the prices. I think what has helped us, I must say, is the Model Year 2026 that we launched across the portfolio with improved efficiencies and therefore improved TCO. It helps us to a good extent in terms of stabilizing the new prices. Whether it has reached the limit, it's very difficult to answer in a binary manner. But I can certainly say that the cumulative price increase during this year has been quite significant.
Yeah. Another question from Pramod Kumar. Can you comment on the current demand environment? July has been very robust despite monsoon. What is driving this demand surge and whether it will be sustainable?
As I mentioned earlier, Pramod, I think the underlying demand fundamentals are pretty strong. We saw e-way bill, diesel consumption, FASTag collection. I think all the indicators indicate a very high movement of goods, which means I think the underlying freight available is pretty robust. We've also discussed that I think this remains directly correlated with the GDP growth. Once the GDP growth is quite robust, what it is today, it also leads to equivalent amount of freight growth, and that then leads to higher demand. I think at this juncture, yes, I think despite the inflation which is happening in the products as well as the fuel prices, we've seen the demand remaining quite robust. That's it?
Yeah. Let me just check. I don't see any others. Okay, there it is. Another question from Kapil. How is the EV financing scenario and have historical resale value concerns been addressed?
The EV retail financing has been improving month-over-month, and I must say, more and more financiers are having confidence in the technology, in the product, and in most cases, we are also offering warranties, a battery warranty especially, which is higher than the tenor of the loan, which is giving a very high comfort to the financiers. More and more financiers I meet, I see a lot of comfort amongst them in funding EVs because their book quality is quite robust, quite okay, as far as EVs are concerned.
Yeah. This is from Jay Kale, Elara. On the demand side, is it replacement demand that is driving the growth? Can you also share some flavor on large fleet operators versus the small operators? Operators and buyers.
Jay, I actually mentioned this last time also, it is very difficult to differentiate between replacement demand and new vehicle purchase, so to say. But generally what happens is large fleet owners are the first ones to replace their existing trucks in four to six years, and they go for newer trucks because they see a clear TCO benefit with the newer trucks.
But at the same time, their existing trucks don't move out of the system, but they are sold to maybe smaller customers, individual vehicle owners, and they then put those vehicles to use on shorter distances. I think overall, the demand is going up, which means there is an increase in the freight which is available, and the capacity utilization of the fleet also remains strong. As I said, very difficult to give a separation between replacement demand, new vehicle demand. Actually, it is a combination of both.
Next question is from Amyn Pirani, JPMorgan. 1Q working capital and FCF has been surprisingly strong considering normal seasonality. Are there any one-offs or any structural changes have happened?
Amyn, I think, we did have some carryover benefit to some extent from Q4. Otherwise, I think the working capital discipline that we have been driving, combined with good operating profit, has actually helped us to deliver a good FCF in Q1. You are right, I think traditionally in Q1 and Q2, we burn working capital. But with the discipline as well as the operating profit, it has led to a good improvement. I must also add that the Indonesia order and the advance that we received from Indonesia has been the one-off, if I may say so, which has helped us on the cash flow in Q1. Nobody's asking here today. What is the reason?
Yeah. I think they're probably struggling, some of them to
There are some more coming from [inaudible]. Are there any other questions on the-
You want to wait for a few minutes?
I can check if there are any other questions. Let me check on email as well.
Yeah. There is a question. There is a question. There is a question from, yeah, Sridhar.
I think he's largely answered it.
Okay.
What is the mix of fleet operators and this has been answered. There is a question from Kapil.
Mm-hmm.
Can you talk about the export outlook for MCV and LCV for maybe two or three years?
Kapil, two to three years is pretty long horizon, but I think we are certainly doing a lot of work in some of the markets that I spoke about, whether it is Africa and also with the entry that we have in Indonesia with this order. We are doing some work in other segments also. I mean, this order in Indonesia also has been in light commercial vehicle and pickup. I think we are using this opportunity to do some work and seed our products in other segments also. But very early to give any kind of outlook. But yes, we are doing a lot of work on the demand generation front as well as launch of new products in some of these international markets. The question, mix of But that we understood.
Okay.
Answered.
Yeah.
No further questions.
Okay, there is another one on email from Pramod Kumar, UBS.
Any comments on operator profitability given rising prices of trucks? And also, has Tamil Nadu reverted to a normal demand post election-led slowdown?
The second one is easier. I think yes, Tamil Nadu has been improving in demand month-over-month. And especially last month was pretty good, very close to the normal situation as far as Tamil Nadu demand is concerned. And what was the first question?
This was on the rising operator profitability.
Yeah. Okay. I think I do not have any index on this, but I can tell you anecdotally from the discussions that we have had with the customers. I think depending upon the route, shippers and the commodities being transported, the diesel price increase is being passed through and therefore, gradually the profitability will come back to the earlier level. Now, take the case of we as shippers. We ship our vehicles on tractor-trailers or trucks. I think we, for example, the auto industry has passed through the diesel price increases pretty soon. And there are quite a few other segments also where this has happened, which is then helping the fleet owners to get the profitability back on track.
One question from Himanshu Singh. Should we continue to see market share gains going ahead?
That will always remain our endeavor.
Give us a minute, please.
Hmm. F rom ICICI Securities.
Just seeing if the questions are queuing up. Please give us a minute. I think with that we have mostly answered all the questions, and we can close the call with that. Any other questions that remain unanswered, we will be happy to take them offline. Thank you so much for your time.