Mahindra & Mahindra (M&M) posted a nearly 18% year-on-year rise in standalone net profit in the second quarter of FY26, helped by a strong growth in tractor and light truck volumes even as its mainstay, sport utility vehicles (SUVs), saw a relatively slower growth.
The Mumbai-based company recorded a net profit of Rs 4,521 crore, beating the Bloomberg estimate of Rs 3,979 crore. Its revenue from operations grew 21% to Rs 33,422, a tad below the Street estimate of Rs 33,887 crore. The company saw its tractor volumes surge 32% to 122,936 units and the SUV segment rise 7% to 146,000 units. Its light commercial vehicle segment grew 13% to 70,000 units.
Better realisations on sale of tractors, tighter internal cost control measures and a gain on the sale of investment helped push M&M’s margins to 15.3% in the September quarter compared with 14.7% in the year-ago period. The automotive industry suffered from a vacuum in demand for nearly half of the September quarter after the government announced the intention to rationalise goods and services tax (GST) rates.
As a result, there was an overstocking of products at the dealer end. However, after September 22, when the new GST rates kick in, there has been a surge in retail sales across categories. “From a single-digit growth for the year we are revising our growth outlook to low double digits for the tractor segment for FY26 for the industry,” said Rajesh Jejurikar, executive director, M&M. “We are, however, not revising our outlook for SUV volumes (growth) which will be in the high teens,” Jejurikar added.
M&M officials said that volume growth was marred by logistics issues in September. There was an industry-wide shortage of tractor trailers (trucks) which are used for shipments of vehicles, leading to delays in dispatches. The present inventory days for M&M’s non-electric SUVs is 15, which is below the company’s expectations. The penetration achieved by electric SUVs within its portfolio stood at 8.7% for the September quarter, which is higher than the industry average of 7.4%. It stood at 2.1% in the second quarter of FY25 for M&M.
M&M noted that there was an increase in commodity costs during the quarter which was offset by internal cost management. With October recording the best-ever volume for M&M due to the festive cheer and the demand boost received due to the cut in GST rates, the company is aiming to keep up the momentum with the launch of XEV 9S (electric SUV) planned later in November.