M&M

Q2 FY26 Review: Strong Core Performance, Expanding Portfolio, and Rural Tailwinds

delivered a robust Q2 FY26 performance, underscoring its leadership in the SUV and tractor segments and its strategic expansion into commercial vehicles through the acquisition of SML Isuzu. 🔹 Automotive & FES Segment Performance - Automotive volumes rose 13.3% YoY and 5.8% QoQ, driving an 18.1% YoY revenue increase. - Farm Equipment Segment (FES) revenue grew 31.4% YoY, with volumes up 31.6% YoY, though down 8.3% QoQ. - EBITDA margin expanded by 558 bps YoY, aided by cost optimization and strong top-line growth. 🔹 GST Impact & Demand Revival - Mid-August to late September saw deferred purchases due to GST rate cut anticipation. - Post-GST rationalization, domestic demand rebounded, especially in rural markets. - Tractors and LCVs, which saw steep price hikes over five years, are expected to benefit significantly from tax reductions. 🔹 Segment Outlook & Volume Guidance - Tractor volumes projected to grow in low double digits for FY26. - LCV growth guidance revised upward to 10–12% (from 5–7%). - SUV volumes expected to grow in mid-to-high teens, supported by strong demand. 🔹 Export Recovery & Global Expansion - Exports rose 40% YoY, led by strong demand in South Africa, Australia, and reopened regional markets. - EV exports to Nepal and resumed operations in Algeria added to momentum. - Tractor exports also revived as neighboring countries normalized operations. 🔹 Product Pipeline & Launch Plans - FY26: Three new ICE models and two BEVs planned. - By FY30: Portfolio to include seven ICEs and five BEVs. - LCV segment to see two new launches in FY26 and five by FY30. - Recent upgrades include Bolero, Bolero Neo, and Thar 3-door; XEV9S EV unveiled. 🔹 Valuation & Investment View - SOTP valuation suggests a 5% upside from current levels. - With strong fundamentals, diversified growth levers, and rural tailwinds, M&M remains a compelling long-term pick. - ‘Accumulate’ rating maintained for investors seeking steady compounding potential.