The second quarter of the 2026 financial year ought to have been a celebratory affair for Tata Motors Limited, particularly following its successful demerger and listing on November 12, 2025. The company’s commercial vehicle (CV) business, the primary focus after the organizational split, delivered robust growth, riding a wave of post-GST 2.0 implementation and festive demand. Yet, when the consolidated figures were reported, they revealed a surprising net loss of Rs 868 crore, painting an unexpected patch of red on the balance sheet.
This contradiction was rooted not in operational failure but in an accounting exercise: a significant non-cash mark-to-market (MTM) loss.
The headline net loss was primarily triggered by a massive accounting adjustment related to the company’s investment in Tata Capital. This MTM loss, defined simply as the required revaluation of an asset based on its current market price, amounted to roughly Rs 2,000 crore.
G.V. Ramanan, CFO, Tata Motors Ltd., elaborated: “The reported profitability at a consolidated level was impacted by a non-cash charge of mark-to-market, which is purely accounting for the investment that we had done in Tata Capital… But if you look at the underlying PBT and the net income, both remain strong at Rs 1,500 crore and Rs 1,200 crore, respectively.”
The issue arose because the price of Tata Capital’s shares, following its recent listing, was observed to be lower than the initial valuation at which Tata Motors held the investment in its books. Since the investment must be recorded at its current market value, the difference between the recorded value and the new, lower market price was mandated to be booked as a loss.
Stripping away this financial reporting artifact reveals a picture of operational health for the recently demerged entity. The core business, which covers the entire commercial vehicle value chain—from trucks and buses to its international downstream operations reported impressive figures, the company management added.