Maruti has long been the shorthand for leadership in Indian autos. But the centre of gravity is shifting. From dominating hatchbacks and sedans, the utility vehicle (UV) market has become the new battleground for passenger car makers.
And Mahindra & Mahindra (M&M) is going after it the same way Maruti once captured small car buyers.
From April to July 2024, Maruti was comfortably ahead of Mahindra in utility vehicles sales, with a gap of over 53,000 units. Fast forward to April-July 2025, and that gap has shrunk to 12,700 units. In July alone, M&M was just 2,900 units behind. The company is on the brink of reclaiming a crown it last held in FY17.
And now, almost a decade later, Mahindra is not just catching up. It is threatening to lead the pack again.
Portfolio Depth Beats One-Hit Wonders
What makes this catch-up more than a statistical fluke is the depth of Mahindra’s UV line-up.
From the rugged Thar to the practical Scorpio-N, the value-for-money Bolero and the premium-feel XUV700 and XUV 3XO, M&M has something for every kind of UV buyer.
None of these models is a runaway hit on its own.
However, together, they form a consistent sales engine. Scorpio volumes alone have more than quadrupled since FY22. The Thar is appealing to aspirational off-roaders, while the XUV 3XO has found favour with younger, city-first buyers.
In contrast, Maruti’s UV strategy still feels like a work in progress. SUV sales make up just around 27% of its total passenger vehicle volumes. For Mahindra, utility vehicles are not a sub-segment. They are the business.
The way Maruti became synonymous with hatchbacks, Mahindra now looks poised to be the name most buyers associate with SUVs.
What the Numbers Say
The numbers only strengthen the case.
Mahindra’s SUV volumes for the first four months of FY26 stand at 201,938 units, up 21.7% over last year. In July alone, it sold 49,871 units, marking a year-on-year increase of 19.8%.
Maruti’s UV sales over the same April to July2025 period are estimated at 214,641 units. In July, its UV volume was around 52,773 units, down 6% from last year.
This seems like a classic case of a laggard catching up while the incumbent slows down. In fact, Mahindra has gained 570 basis points of revenue market share in SUVs over the past year.
If you think about it, that kind of share gain is not cyclical. It is structural.
Mahindra’s Q1FY26 operating numbers back it up. The standalone auto Earnings before interest and tax (EBIT) margin, excluding EVs, came in at 10%. For its farm segment, EBIT margin was 19.8%.
Maruti’s margin for the same period was 10.4%, under pressure from new plant costs and input inflation. While Maruti still has a clear cost advantage and unmatched scale, its SUV business is still playing catch-up.
Mahindra has already made that leap. Now it is all about whether it can stay there.
The EV Push is Real
Maruti’s big electric vehicle (EV) bet is the e-Vitara, expected sometime in FY26. That may help it enter the segment, but Mahindra is already preparing for the next phase of the EV story.
The company plans to launch two new battery electric vehicles in early 2026. Volumes from EVs are expected to cross 5,000 to 6,000 units per month within the next year.
From zero battery electric vehicle (BEV) sales in FY24, Mahindra is targeting 48,000 EV units in FY26 and as many as 1.3 lakh units by FY28.
This is not just ambition on paper. The company has applied for PLI benefits for its new platforms and expects margins to improve as scale builds.
It has also moved quickly to address potential risks. While rare earth availability is emerging as a concern for many automakers, M&M says it has secured inventory and is switching to alternate materials like ferrite magnets. No production losses are expected, even if the market tightens.
Rural Cushion, Tractor Advantage
Unlike Maruti, Mahindra has a second strong engine, tractors.
The rural market has held up well so far this year, and Mahindra has benefited. In Q1FY26, tractor volumes were up 10.4% year-on-year. EBIT margins for the farm segment stood at 19.8%, among the highest in India’s auto sector.
This gives Mahindra a crucial buffer.
So, when passenger vehicle (PV) demand softens, its farm business can help smooth earnings. And when UV demand is strong, it can chase growth.
Maruti has no such cushion. It remains a single-segment bet on passenger vehicles. In a volatile market, that difference matters.
Diversifying all the way
What also sets Mahindra apart from most auto peers is its diversified business empire. Beyond autos and tractors, the company has interests in financial services, hospitality, logistics, IT services and renewables.
The financial services arm continues to post steady growth, contributing to consolidated earnings. Meanwhile, the Mahindra Group’s listed investments in companies like Tech Mahindra, Mahindra Finance and Mahindra Lifespaces provide both cash flows and optionality.
The group also has an active EV ecosystem strategy, with investments in battery pack assembly, last-mile mobility, and software-defined vehicle platforms. This isn’t just a car company. It is an industrial group that is steadily aligning its portfolio with future mobility trends.
Valuation Gaps and Investor Perspective
Despite all this momentum, Mahindra trades at a slight premium to Maruti on forward earnings.
At current prices, M&M trades at around 28.6 times trailing earnings. Maruti is priced the same at nearly 27.2 times earnings.
Yet Mahindra’s net profit expected growth in the coming years is expected to exceed that of Maruti’s.
Mahindra’s return ratios are also slightly better. Its return on equity (ROE) is at 18%, while Maruti’s is at 16%.
The company is also sitting on rising free cash flows and increasing net cash.
This kind of financial strength, combined with market share gains and product depth, is not very common.
But here’s what could go wrong
Despite all the momentum, Mahindra’s journey to the top isn’t risk-free.
First, capacity is starting to look tight. While demand for models like the Thar, Scorpio-N and XUV 3XO remains strong, production constraints could mean longer waiting periods, and in some cases, potential loss of sales. The company is planning a new plant in Zaheerabad, Telangana, but that will take time to scale.
Second, the EV roadmap, while aggressive, is still early-stage. Execution risk is real, especially given how competitive the electric space is becoming. Maruti, Tata Motors, Hyundai and several global players are all gunning for a share of the same pie. If Mahindra stumbles on pricing, battery costs, or consumer adoption, the EV targets may need revisiting.
Third, while tractor margins remain high, they are not immune to volatility. A weak monsoon or rural slowdown could dent profitability just when the auto side is accelerating.
Lastly, valuations are no longer cheap. The stock has rallied sharply. Thus, any earnings disappointment, delay in EV launches, or broader slowdown in auto demand could impact investor sentiment.
So is Mahindra really the new Maruti?
In the utility vehicle space, the answer may well be yes. Mahindra has the products, the momentum, and the margins to back its case for leadership.
Maruti still enjoys unmatched reach, especially in the CNG and hybrid segments. And with two new SUV launches lined up this year, it’s gearing up for a strong counterattack. But for now, the UV race is Mahindra’s to lose.
That said, staying ahead won’t be easy. Mahindra is firing on all cylinders, but sustaining leadership means executing flawlessly across UVs, EVs, tractors, and everything in between.
For investors, the question isn’t whether Mahindra deserves a place in their portfolio. It’s whether they’re ready to bet on the company that could define the next decade of Indian mobility.
Much like Maruti did, once upon a time.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.
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