M&M

Delivers Strong Q4, SUV Dominance Continues

posted a 26% YoY rise in standalone revenue to ₹39,550 crore in Q4FY26, beating Street expectations. Net profit surged 53% to ₹3,740 crore, aided by strong SUV realizations and a sharp rise in other income, including ₹500 crore of PLI accruals linked to EV models. The stock gained 6% post‑results, reflecting investor confidence in its consistent growth story. Financial & Operational Highlights (Q4FY26) Revenue: ₹39,550 crore (+26% YoY). SUV sales: ~660,000 units in FY26, contributing ~80% of revenues. Auto EBIT margin (ex‑EVs): 10.9%, supported by price hikes amid commodity inflation. Other income: ₹590 crore (10x YoY), driven by PLI accruals. Net profit: ₹3,740 crore (+53% YoY). Segmental Insights SUVs: Industry‑beating growth; launches like XEV 9e, BE 6, Scorpio, Thar Roxx, Bolero, XUV 3XO sustained demand. EVs: EBIT margin improved to 5.1%; penetration at 9.6% of portfolio vs industry average ~5%. Management targets 13–21% penetration in 5 years. Farm equipment: Domestic market share rose to 44%, but growth expected to slow to mid‑single digits on high base and weak monsoon outlook. International operations face headwinds in US, Brazil, Turkey; exits in Finland, Japan, Turkey to improve profitability. Strategic Outlook Capacity expansion and deep SUV pipeline to sustain growth. EV economics improving, aided by scale and PLI incentives. Management confident of delivering 15–20% EPS CAGR over next five years. Valuation: stock trades at 22x FY27 consensus earnings, seen as expensive relative to peers. Conclusion M&M’s Q4FY26 results reaffirm its position as one of India’s most consistent auto growth stories. SUV dominance, improving EV margins, and rationalization in farm operations provide a strong runway. However, valuation premiums and farm sector risks mean execution discipline will be critical to sustaining investor confidence.