Summary
Mahindra & Mahindra Ltd. - Q3 FY26 Earnings Call Summary Wednesday, February 11, 2026 3:30 p.m. IST
Event Participants
Executives 3 Amarjyoti Barua (Group CFO), Anish Shah (Group CEO & MD), Rajesh Jejurikar (ED and CEO, Auto and Farm Sector)
Analysts 5 Ashwani Kumar, Chandramouli, Gunjan, Kapil, Raghu, Rakesh
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹50,000+ crores | +26% YoY; first time the group has crossed this quarterly milestone. |
| Operating PAT (Consolidated) | ₹[Not Explicitly Stated] | +66% YoY; driven by strong volume/margins in Auto/Farm and Mahindra Finance turnaround. |
| Reported PAT (Consolidated) | ₹[Not Explicitly Stated] | +47% YoY; lower than operating growth due to Labour Code impact and MMFSL reserve release base effect. |
| Consolidated ROE | 20.1% | Above the 18% long-term target; management expects to maintain 18% +/- range. |
| Auto Segment Volume | [Not Explicitly Stated] | +23% YoY; SUV volumes specifically up 26% YoY. |
| Auto Margin (Standalone) | 10.4% | +90 bps YoY; excludes contract manufacturing; includes EV impact. |
| Farm Segment Volume | [Not Explicitly Stated] | +23% YoY; domestic performance strong (+64%) despite international impairments. |
| Farm Margin (Co-Tractor) | 21.2% | +240 bps YoY; near historical peak performance despite industry volatility. |
| MMFSL GS3 Assets | < 4.0% | Continuous improvement; maintained below internal benchmark of 4.5%. |
| MMFSL AUM | ₹[Not Explicitly Stated] | +12% YoY; pivot to growth announced following 3 years of asset quality focus. |
Geographic & Segment Commentary
- Auto (SUVs & LCVs): SUV revenue market share stood at ~24% with number one position maintained. LCV segment saw a revival with market share rising to 51.9% (+10 bps) as replacement cycles kicked in and GST cuts improved operator viability by 4-5% in profit terms.
- Farm Equipment: Domestic tractor market share was 44.1% YTD despite temporary stock-outs at Swaraj. Farm machinery revenue grew 45% YoY, consistently crossing ₹100 crores monthly, signaling successful diversification beyond tractors.
- Financial Services (MMFSL): Profitability rose 97% on an operating basis as the segment completed its “stability” phase. Focus shifts from asset quality and tech-overhaul (Project Udaan) to responsible growth and cross-selling fee-based products to improve ROA toward 2.4-2.5%.
- Growth Gems (TechM, Logistics, Lifespaces): Growth Gems collectively grew 3x YoY in profit. Lifespaces profits rose 5x due to project completions and land acquisitions, while Logistics posted its first profitable quarter in 11 quarters following execution-led leadership changes.
Company-Specific & Strategic Commentary
- EV Strategy & Capacity: Sold 41,000+ e-SUVs to date (avg. 4,000/month). No new EV launches planned for the remainder of CY2026, but the “BO7” (Vision S/T) is slated for CY2027 to drive major volumes.
- Trade Agreements (EU/US FTA): Management views the EU FTA as a benefit, allowing 0% tariff exports for Indian-made cars (2.5x current quota) while protecting local manufacturing by requiring European OEMs to maintain an Indian presence to be competitive.
- Manufacturing Expansion: Total capacity to increase by 7,000-8,000 units/month in FY27 through Chakan de-bottlenecking and the new IQ platform. A new Greenfield facility in Nagpur is planned for CY2028 with long-term capacity potential of 500,000 units.
- Asset Monetization: Announced plans for an IPO of the Last Mile Mobility (LMM) business next year to unlock value, though not specifically for cash raising.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| GDP/Economic Growth | 8-10% Real Growth | Management belief in India’s long-term acceleration driven by infra, digital stack, and demographic trends. |
| EV Volume Target | 80,000+ units/year | For CY2027 based on current portfolio plus 9S and upcoming “BO7” models. |
| Tractor Industry | 24% Growth (FY26) | Higher than initial “low double-digit” estimates; FY27 base will be high but reservoir levels remain favorable. |
| TechM Margins | 15% EBIT Margin | Target timeframe remains FY27 following the completion of the delivery organization transition. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Inflation | Inflation observed in precious metals and iron-related products; M&M took a 1% price hike in January to mitigate impact. |
| Supply Chain (Memory Chips) | New “rare earth” risk; memory chip shortages are affecting infotainment systems across both ICE and EV portfolios, requiring spot market purchases at premiums. |
| International Subsidiaries | Restructuring continues in Japan and Turkey (Foundry); impairments were taken this quarter but trailing costs are expected until H2 FY27. |
| Regulatory (CAFE/BS7) | Uncertainty remains over final CAFE norms and BS7 timing; management is focusing on maximizing both ICE and EV growth rather than managing specific ratios. |
Q&A Highlights
Supply Chain & Commodities
- Question: What is the impact of precious metal inflation and memory chip shortages? (Kapil)
- Answer: Every commodity is inflating. M&M is covered in the short-term via hedges and a 1% price hike. Memory chips are the “new semiconductor” risk affecting the whole portfolio; M&M is paying premiums to secure supply (Amarjyoti Barua/Rajesh Jejurikar).
7XO Demand Skew
- Question: 70% of 7XO demand is for top variants; is there a risk of losing the lower price points as seen with the 700? (Rakesh)
- Answer: M&M eliminated the “MX” series to ensure even entry-level “AX” variants have three screens and connectivity. This preserves the brand’s tech value proposition across all price points (Rajesh Jejurikar).
Farm Sector Outlook
- Question: Will Maharashtra’s subsidy-led 24% tractor growth sustain next year? (Raghu)
- Answer: Maharashtra added ~35,000 “extra” units due to subsidies which won’t repeat. However, high reservoir levels and government rural spending are strong nationwide enablers for FY27 (Rajesh Jejurikar).
EU FTA Impact
- Question: How does the EU FTA affect competition from European car makers? (Raghu)
- Answer: The FTA encourages European makers to continue manufacturing in India rather than shipping idle capacity from EU plants. It also lowers M&M’s cost for imported electronics (Anish Shah).
Key Takeaway
Mahindra & Mahindra delivered a strong Q3 FY26, characterized by a milestone ₹50,000 crore consolidated revenue and 66% operating PAT growth. The quarter marked the successful “breakthrough” of Mahindra Finance, which pivoted to growth after three years of asset quality stabilization, and the continued scaling of “Growth Gems” like Lifespaces and Logistics. Auto margins remained industry-leading at 10.4% despite commodity pressures, supported by robust SUV demand (26% volume growth) and an LCV revival. While 70% of new 7XO bookings are for top-end variants, management is leveraging tech-heavy entry models to maintain broad market reach. Looking ahead, M&M is aggressively expanding capacity with a new Greenfield site in Nagpur for CY2028 and targets 80,000+ EV units annually by CY2027. Despite macro risks like memory chip shortages and international subsidiary restructuring, the group remains positioned to capitalize on an 8-10% real GDP growth outlook for India.
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