The two leading commercial vehicle (CVs) makers, Tata Motors and Ashok Leyland, have announced strong sales for the second quarter of FY27, and continued the momentum from earlier quarters.
The surge in CV sales (view table below) comes despite no signs of the Middle East crisis coming to an end coupled with the monsoon season this year being broadly deficient in several states.
Considerable attention is paid to monthly sales numbers of leading CV makers by economists and analysts, as they are often a ‘mirror’ to study the cyclical nature of infrastructure development and business activity in a country.
That’s because the commercial vehicles sector, which transports daily essentials like fruits and vegetables alongside industrial materials like cement and steel, provides vital information on broader economic trends.
The data for GDP for second quarter of FY27 is expected to be announced on November 30. The economy grew by 7.8% in the first quarter of FY27, positioning the country among the fastest-growing globally.
Q2 FY27 Surge: E-commerce and Infrastructure Drive 30%+ Domestic Gains
The recently listed Tata Motors, the largest player in the CV segment, reported an impressive 42.7% y-o-y growth in September 2026 quarter sales to 135,114 units, and that was thanks to a 177.3% y-o-y jump in overseas sales to 21,132 units.
Domestic CV sales also grew 30.9% y-o-y to 113,982 units. The company has highlighted HCVs (heavy commercial vehicles) benefited from continued activity in core sectors – sustained infrastructure, construction and mining activity. And medium and light CVs benefited from improved demand from e-commerce and FMCG user industries.
Tata Motors v/s Ashok Leyland – Growth in CV sales in September 2026 quarter
| Operational parameter | Tata Motors | Ashok Leyland |
| Growth in vehicle sales in September 2026 quarter (% y-o-y) | 42.7% | 31.7% |
Girish Wagh, MD and CEO, Tata Motors Ltd, in a press release, said, “We are encouraged by the strong, broad-based momentum built across our businesses in the past 12 months as an independent commercial vehicle company, reflecting the strength of our portfolio, technology-led innovation and deep customer understanding.”
For perspective, Tata Motors’ sales of CV grew nearly 26% y-o-y to 108,700 units in the June 2026 quarter.
Meanwhile, Ashok Leyland grew its sales by nearly 31.7% y-o-y to 64,677 units in the second quarter of FY27, and that was thanks to strong demand for its medium and heavy commercial vehicles.
For perspective, Ashok Leyland reported its highest ever commercial vehicle sales of 48,763 units in the first quarter of FY27, a growth of 10.2% y-o-y
Macro Headwinds Bypassed: How the 18% GST Cut Cushioned the Blow
The above growth in CV sales comes at a time when the domestic economy and the international economy have been facing headwinds from the Middle East crisis since the end of February, 2026, and it has resulted in several hikes in domestic retail fuel prices.
The commercial vehicle segment has continued to benefit from the various measures taken by the RBI and the central government to boost economic activity in the country, and in the September 2026 quarter the sector did not face any headwinds from the Middle East crisis.
In addition, the GST on trucks, buses and commercial vehicles was reduced to 18% from the earlier 28%, from 22 September, 2025. As a result, once again in the second quarter of FY27, CV makers benefited from a low base effect on a y-o-y basis.
Equally important, the recently concluded monsoon season in different parts of the country was broadly deficient, with Maharashtra and Karnataka declaring drought in different districts / talukas across the respective states. However, the impact of the sluggish monsoon season this year has not yet been reflected in CV sales.
Margin Pressure: Tracking the Impact of Steel and Copper Surges on Profitability
The auto sector including the CV segment would once again have to deal with higher input costs, especially steel and copper prices.
Higher input costs resulted in Tata Motors’ operating profit margin declining marginally y-o-y to 10.2% in the first quarter of FY27.
Rising input costs hurt Ashok Leyland too, and its operating profit margin declined 110 basis points y-o-y to 10%.
To deal with the situation, CV makers had hiked prices in the second quarter of FY27, and investors will be closely watching whether the manufacturers have been able to protect their operating profit margins fully.
CV prices have also been hiked from October 1.
The Iveco Merger: Tata Motors Eyes a Euro 21 Billion Global Footprint
Tata Motors in a press release dated 4 September, 2026, highlighted that its voluntary tender offer for Iveco Group will run from 7 September to 26, October, 2026.
Assuming the tender offer is successful, Tata Motors has highlighted the combined entity will have revenues of Euro 21 billion (nearly Rs 2,28,000 crore) split across Europe (nearly 46%), India (nearly 32%), South America (nearly 8%) and rest of the world (nearly 14%) with attractive growth opportunities in emerging markets in Asia and Africa.
Strong vehicle sales in the June 2026 quarter helped Tata Motors standalone revenue from operations grow 23.3% y-o-y to Rs 19,329 crore.
Ashok Leyland’s Payload Expansion and Sustained Local Demand
Ashok Leyland has also launched several trucks with enhanced payload.
The expansion plans of both the CV makers highlight their confidence in the Indian and global economy, and their respective growth prospects, despite the Middle East war.
Governments in India and overseas have taken several policy measures including lower taxes and other policy measures to grow, despite the challenges.
This is clearly reflected in the confidence of the two leading CV makers, going forward.
Capital Efficiency: Dissecting Tata Motors’ 53.6% Standalone RoE
Tata Motors had a standalone Return on Equity of 53.6%, according to Screener.in, while it was 30.2% for Ashok Leyland.
Efficiency leader – Tata Motors marches ahead
| Commercial vehicle maker | Standalone return on equity (in %) |
| Tata Motors | 53.6% |
| Ashok Leyland | 30.2% |
For both the companies, the core auto business is reflected in their standalone results.
Current Valuations: Evaluating CV Stocks Ahead of 2026 Projections
Tata Motors ended 1.5% lower at Rs 415.3 on Thursday. The stock trades at a standalone P/E of 22.9, according to Screener.in.
Ashok Leyland ended 2.2% lower at Rs 151 on Thursday. The stock trades at a standalone P/E of 23.
Valuations of CV makers
| Commercial vehicle maker | Standalone P/E |
| Tata Motors | 22.9 |
| Ashok Leyland | 23.0 |
The commercial vehicle segment is expected to grow going forward, despite the Middle East crisis and the broadly deficient monsoon season in the country.
For Tata Motors, once it has successfully completed the voluntary tender offer, the merged entity should benefit from Italy-based Iveco’s presence in fast growing markets in North Africa, South America and Eastern Europe.
Also, both the players are once again expected to benefit from strong local CV sales going forward, given the policy measures taken by both the RBI and the central government.
Readers can put Tata Motors and Ashok Leyland on their watch list of stocks for 2026 and see if their performance matches expectations.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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