SUV Leadership and Tractor Resilience Anchor

M&M

’s Outlook

Mahindra & Mahindra (

) reported a robust Q3FY26 performance, with strong growth across both automotive and farm equipment segments. Automotive volumes rose 23.1% YoY, driving revenue growth of 26.6% YoY, while farm equipment revenues increased 24.9% YoY. Despite margin pressures from labour code provisions and commodity inflation, M&M continues to expand capacity and strengthen its product pipeline, positioning itself for sustained growth in SUVs, tractors, and electric vehicles. Automotive Segment - Volumes: +23.1% YoY, supported by improved realisations. - Revenue growth: +26.6% YoY. - SUV market share: 24.1%, up 90 bps YoY. - GST rate cut (28% → 18% for small cars) benefits industry sentiment, though M&M’s SUV-heavy portfolio sees limited direct impact. - Demand momentum remains strong, with rising preference for SUVs. Farm Equipment Segment (FES) - Revenues: +24.9% YoY; volumes: +22.8% YoY. - Market share: 44%, down 20 bps due to Swaraj Tractor stock-outs (since recovered). - Tractor growth outlook: +24%, supported by reservoir levels, rural income, and infrastructure. Capacity Expansion & New Products - New launches: 1 ICE and 1 BEV already introduced; 2 ICE refreshes expected in FY26. - Near-term: Add 5,000–6,000 ICE units and 3,000 EV units by mid-2026. - CY27: Expand ICE capacity by 7,000–8,000 units at Chakan (IQ platform). - CY28: Greenfield integrated facility to add 8,000–10,000 units initially, scaling to 500,000 units, plus 100,000 tractors. Risks & Mitigants - Margin pressures from commodity inflation; 1% price hike in Jan 2026 to offset. - Chip shortage remains an industry risk, though M&M reports secured supplies. - Competition in SUVs intensifying, but strong portfolio and brand strength provide resilience. Valuation & Outlook - Secured largest-ever export order: 35,000 LCVs to Indonesia. - SOTP valuation suggests 7% upside. - Rating: Accumulate (Overweight), supported by strong demand, capacity expansion, and diversified growth drivers.