Mahindra & Mahindra Ltd., a prominent Indian multinational conglomerate, that operates in various sectors including automotive, farm equipment, and financial services, in its Q4 earnings call highlighted robust growth strategies across its EV and tractor businesses. The EV segment saw 75% of bookings for high-end “pack 3” models, with plans to introduce lower-priced variants, leveraging existing manufacturing for better margins and minimal ICE cannibalization. Software enhancements and PLI certification progress bolstered EV optimism, while production splits 60% XUV.e9 and 40% XUV.e8, with a cautious delivery ramp-up. Supply chain resilience was noted, with rare metal restrictions from China largely limited to military use. The tractor business enjoyed strong margins, high single-digit growth projections, and market share gains from new lightweight products, brand refreshes, and optimized channels, particularly in south and west India. “Growth gems” like Excelo, Aerostructures, and CLPL also show strong performance and future potential.
Mahindra & Mahindra demonstrated robust growth, with revenue rising 20% year-over-year, and a 2.7% quarter-on-quarter increase. Consolidated profit after tax grew 13.3% year-over-year to INR3,541.85 crore, though it saw a 2.3% quarter-on-quarter decline, supported by a significant jump in other income to INR701.7 crore from INR355.7 crore year-over-year. The automotive segment drove performance with an 18% year-over-year increase in vehicle sales, particularly in SUVs, while the farm equipment sector reported a 23% year-over-year volume growth, boosting tractor market share by 170 basis points to 43.3%. For the full FY25, consolidated PAT rose 20%, underpinned by record market shares and robust cash flows. In the quarter, Mahindra incorporated Mahindra Advanced Technologies to bolster innovation, and expanded its design studio to enhance product development. The company achieved a 10.79% year-over-year sales growth in FY25, securing a 25.51% passenger vehicle market share, and announced plans for facelifted Thar and XUV700 models by 2026.
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Financial/Operational Metrics:
- Revenue: INR42,599 crores, up 20% YoY.
- Net Income: INR3,295 crores, up 20% YoY.
- Diluted EPS: INR29.04, up 18% YoY.
FY26 Outlook:
- Farm Industry Growth: Projected high single-digit industry growth for tractors in FY26.
- Capacity Expansion: 1,500 units for THAR (to 11,000), 1,500 units for 3XO (to 11,000), and 1.2 lakh units at Chakkan for a new platform.
- International Farm Recovery: Expected recovery in Turkey, Brazil, and Magna (U.S.).
Analyst Crossfire:
- Farm Industry Growth and Auto Product Launches (Analyst): Projected high single-digit industry growth for tractors in FY26, with a focus on execution over market share gains. Planned launches for 2026 include three ICE products (two mid-cycle refreshes), two born-electric products, and two LCVs, with a new platform vision to be revealed in August 2025 (Rajesh Jorikar – CEO).
- Growth Gems Valuation Targets & International Farm Recovery (Analyst): Scalable growth gems (e.g., Susten, Last Mile Mobility) targeted for $2-3 billion valuations by FY30, while emerging gems aim for $1 billion. Specific targets include 5X hospitality growth, 14X real estate pre-sales, and 10-15X Last Mile Mobility growth over a decade. Expected recovery in Turkey, Brazil, and Magna (U.S.) after a 104-crore aggregated loss in FY25, with strategic actions to streamline Ma’am Japan and Sampo (Anish Shah – MD).
- M&A Strategy & EV Booking Momentum and Delivery Strategy (Analyst): Mahindra maintains a high bar for acquisitions, prioritizing scale, market-building returns, strong customer value, and execution capability. The SML acquisition met these criteria at a reasonable valuation, and similar opportunities will be pursued selectively. Company reports steady, strong EV booking momentum despite cancellations due to uncertain wait times, with a four-month average wait. Deliveries are deliberately slowed to ensure a high-quality, two-to-three-hour customer experience, addressing complex app installations and charger readiness (Anish Shah – MD).
- EV Production Flexibility & Emission Regulations(Analyst): M&M confirmed EV production capacity is flexible, with 5,000 units/month operationalized and a 60-40 split favoring XUV.e9 over XUV.e8. Battery packs (79/59 kWh) are fungible, and supply chain processes now focus on exclusive vs. common parts to adapt to demand shifts. No new clarity on CAFE norms, with ongoing SIAM-government discussions. If implemented in 2027, Mahindra estimates 25% of its portfolio will need to be EVs to comply (Anish Shah – MD).
- ICE Portfolio Lifecycle & EV Supply Chain Resilience (Analyst): Company acknowledges the XUV700’s strong demand and competitive positioning, with refresh actions underway to proactively manage its lifecycle. M&M clarifies that rare metal restrictions in India target military end-use, not automotive. Mahindra is well-covered by inventory, and end-use certification processes for rare metal imports (e.g., via Hungary) are expected to be clarified, posing no immediate risk (Rajesh Jorikar – CEO).
- Tractor Market Share Gains & Regional Outlook (Analyst): Market share gains is attributed to multiple improvements in products, channels, manufacturing, and customer understanding, ensuring sustainability. Company highlights specific actions like lightweight product launches (Swaraj Target, OJA), Swaraj’s brand refresh with Dhoni, and Yuvo’s affordability enhancements, driving gains over eight to ten quarters. For tractors in FY26, south and west regions are expected to see strong growth, leveraging Mahindra and Swaraj’s competitive strength for potential market share gains (Rajesh Jorikar – CEO).
