New Delhi: A surge in sports utility vehicle (SUV) sales, growth in its logistics and components business, and cost-saving measures helped Mahindra & Mahindra become the first carmaker to report net-profit growth during the September quarter.
India’s second-largest carmaker’s consolidated profit after tax (PAT) rose 30% to ₹5,167 crore, while revenue from operations grew 25% to ₹57,553 crore as the firm continued to see strong demand for its internal combustion engine and electric SUVs, even as tractor volumes fell. The sales of these passenger vehicles grew 26% year-on-year during the quarter to 183,000 units.
The surge in profit came after both market leader Maruti Suzuki and the country’s fourth-largest carmaker Hyundai Motor India reported a steep drop in profits due to rising commodity prices. Maruti Suzuki reported a 26% drop in profit to ₹2,466 crore, while Hyundai Motor India recorded a 24% decline to ₹1,196 crore.
Mahindra’s shares surged 5.6% on Thursday after the results were released during market hours. The Nifty Auto index rose 4.1%.
Anish Shah, group chief executive at Mahindra & Mahindra, said during a post-results media conference that the company undertook several key initiatives across businesses to deliver a strong growth in profits despite inflationary pressures.
“A lot of actions are being taken on pricing, hedging, product mix, and diversifying the supplier base. Capacity is going to go up 27% by the time we exit the financial year 2027,” Shah said.
He added that while the farm business faced headwinds from inflation, a monsoon deficit, and a sharp drop in global demand, it responded by refreshing its product line, adjusting prices, accelerating exports, and exiting certain international markets.
To capitalise on growth in its passenger vehicle business, the company plans to launch four new models by June 2027. The upcoming lineup includes an all-new electric vehicle, a passenger pickup truck, a model refresh, and a brand-new vehicle built on its latest NU_IQ platform.
Rural headwinds
Despite record gains in its passenger vehicle segment, tractor sales dropped 6% to 116,000 units due to a deficit monsoon and a delayed festive season. The company lowered its full-year tractor growth guidance from 5% to flat performance compared to last year.
Maruti Suzuki and Bajaj Auto also flagged weakness in the rural market during their post-earnings commentary, as an El Niño-induced monsoon deficit caused droughts in several states and dragged down vehicle demand.
The company also highlighted commodity inflation headwinds as prices of steel, copper and other metals used in manufacturing have surged due to the conflict in West Asia over the past nine months.
However, Shah expressed optimism that conditions will begin to normalise and fully stabilise by the start of the next financial year. “A number of cost actions and operating leverage have gone through as well and that has resulted in the strong performance that you have seen in both Q1 and Q2. What we see for the third quarter is some pressure, but hopefully getting better. Oil prices having come down in the past 24 hours give us a little more hope as well,” he said.
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