Mahindra & Mahindra Q2 Profit Rises 25% to Rs 4,588 Crore on Strong SUV Sales

MUMBAI, Nov 6: Mahindra & Mahindra (M&M) reported a 25 per cent year on year increase in consolidated profit after tax (PAT) to Rs 4,588 crore for the second quarter of the financial year 2026-27, supported by strong demand for sports utility vehicles (SUVs) and improved performance across its automotive and financial services businesses.

The automobile manufacturer had recorded a consolidated profit of Rs 3,673 crore during the corresponding quarter of the previous financial year. Its consolidated revenue from operations also increased 25 per cent to Rs 57,553 crore during the July-September period, compared with Rs 46,106 crore a year earlier.

The company’s standalone performance also remained positive, with net profit rising 12.9 per cent to Rs 5,102 crore against Rs 4,521 crore in the year-ago quarter. Standalone revenue increased 27.1 per cent to Rs 42,477 crore, reflecting higher vehicle sales and improved realisations.

The results, announced on November 5, highlighted the growing contribution of the automotive division, which continued to benefit from strong consumer interest in SUVs and electric vehicles.

M&M’s automotive business recorded a 55 per cent increase in consolidated profit after tax to Rs 2,388 crore. Revenue from the segment climbed 39 per cent to Rs 37,756 crore during the quarter.

Total automobile volumes increased 26 per cent year-on-year to approximately 3.31 lakh vehicles, including sales through subsidiaries. Utility vehicle volumes stood at around 1.83 lakh units, reflecting the company’s strong position in India’s competitive passenger vehicle market.

The company reported an SUV revenue market share of 24.3 per cent during the quarter, retaining its leading position in the segment. Its electric SUV revenue market share also reached 30.1 per cent, indicating growing acceptance of its electric mobility offerings.

Mahindra’s performance comes amid increasing competition among domestic and international automobile manufacturers, particularly in the SUV category. Rising consumer preference for larger vehicles, improved features and multiple powertrain options has encouraged companies to expand their product portfolios.

The company’s expanding electric vehicle business is another important component of its long-term growth strategy. It has been investing in manufacturing capacity, technology and product development to strengthen its position in India’s rapidly developing electric passenger vehicle market.

However, the farm equipment division experienced a comparatively weaker quarter. Consolidated revenue from the segment declined six per cent to Rs 9,572 crore, while profit after tax fell nine per cent to Rs 1,053 crore.

Tractor sales declined six per cent year-on-year to approximately 1.16 lakh units during the reporting period.

The weakness in agricultural equipment demand was linked to a shift in the festive season, weaker rural purchasing power and unfavourable agricultural conditions in several regions.

The company also revised its forecast for India’s tractor industry, moving its expectation from five per cent growth to flat performance for the current financial year.

Management attributed the cautious outlook to the weakest monsoon in a decade, low reservoir levels and rising agricultural input expenses, which have affected farmers’ purchasing capacity.

The rural economy remains an important factor influencing tractor demand because farmers’ buying decisions are closely connected with crop production, rainfall patterns, agricultural income and access to credit.

M&M indicated that the current slowdown could affect tractor demand and profitability in the coming quarters. It expects pressure on core tractor margins during the third quarter, with improvement anticipated in the fourth quarter and normalisation in FY28.

Higher commodity prices have also emerged as a challenge for the automobile industry. Rising costs of steel, copper and other manufacturing inputs have increased pressure on vehicle manufacturers, requiring them to balance pricing decisions with customer demand.

Mahindra has been using cost-control measures, operational efficiencies and selective price adjustments to manage the impact of higher input expenses.

Its diversified business portfolio has provided additional support during the quarter, particularly through financial services and technology operations.

Mahindra Finance recorded a 15 per cent increase in assets under management (AUM), while its profit after tax grew 61 per cent. The company’s gross Stage 3 assets stood at 3.42 per cent, an important indicator of the quality of its loan portfolio.

Tech Mahindra also delivered improved financial performance, with profit after tax increasing 33 per cent. Its earnings before interest and tax (EBIT) margin improved to 14.8 per cent, representing an expansion of 260 basis points.

The improvement in technology services reflects ongoing efforts to strengthen operational efficiency, improve project execution and enhance profitability.

Other businesses within the Mahindra Group also contributed to the overall performance. Mahindra Lifespace Developers recorded residential pre-sales of approximately Rs 1,100 crore, marking an increase of 41 per cent. Mahindra Logistics reported revenue growth of 24 per cent to Rs 2,095 crore.

The company’s consolidated return on equity stood at 21 per cent on an annualised basis, while earnings per share for the first half of FY27 reached Rs 89.5.

Commenting on the results, Group Chief Executive Officer and Managing Director Anish Shah said the 25 per cent growth in consolidated profit reflected the resilience of the group and disciplined execution across its businesses.

He noted that the automotive division continued to benefit from strong consumer demand, while the farm equipment segment faced challenges due to the shift in the festive calendar.

The company’s latest results also attracted a positive response from investors. Mahindra & Mahindra shares gained 5.6 per cent on Thursday following the earnings announcement.

On Friday, November 6, the stock extended its gains, rising as much as 4.4 per cent to Rs 3,265.40 in morning trading, outperforming the benchmark Nifty 50.

Market analysts said the strong performance of the SUV business, healthy vehicle bookings and relatively lean inventory levels were supporting investor confidence.

Brokerages also highlighted the company’s broader earnings base, which helped cushion the impact of weaker tractor sales. However, they cautioned that higher input costs, electric vehicle investments and agricultural market weakness could affect margins in the near term.

Looking ahead, Mahindra plans to introduce five new vehicles by the end of June 2027. The upcoming launches, alongside additional electric vehicle manufacturing capacity, are expected to strengthen its presence in the passenger vehicle market.

The company is also expected to focus on improving production efficiency, expanding its distribution network and increasing the contribution of higher-value vehicles.

The performance of the tractor business will remain an important factor to watch, particularly as rainfall conditions, reservoir levels and rural income influence purchasing decisions.

For the automobile industry, the results underline the continuing strength of India’s SUV market while highlighting the uneven recovery across different vehicle categories.

M&M’s ability to maintain its growth momentum will depend on sustaining demand in its automotive business, managing manufacturing costs and restoring strength in its farm equipment operations.

The September-quarter results demonstrate how the company’s diversified operations have helped maintain consolidated earnings growth despite challenges in one of its traditionally important business segments.