M & M — Q4 FY26 earnings call

Call held 5 May 2026

Management summary

Mahindra & Mahindra delivered a strong Q4 and FY26, with consolidated PAT growing 42% and 35% respectively, driven by robust performance across Auto, Farm, and Mahindra Finance. The company achieved a 20% ROE and 57% annualized EPS growth over five years. Strategic exits from international farm businesses and a foundry incurred impairments, while supply chain challenges persist, necessitating proactive inventory management.

Highlights

  • Consolidated Profit After Tax (PAT) for Q4 FY26 increased by 42% and for the full fiscal year by 35%.

  • Full year Return on Equity (ROE) reached 20%, surpassing the target of 18%.

  • Auto sector demonstrated strong performance with 19% volume growth and an 80 basis points margin improvement.

  • Farm sector also showed robust growth with 24% volume increase and 150 basis points margin expansion.

  • Mahindra Finance recorded a 60% profit growth year-over-year, excluding prior year provision release, and improved asset quality with Q4 GS3 at 3.41%.

  • Growth Gems collectively increased profit by 50% year-over-year, with TechM growing 14%.

  • Net cash generation for the year was ₹16,000 crores, leading to a cash balance of ₹41,000 crores.

Concerns

  • Farm sector's overall profit growth was dragged down to 13% due to impairments of ₹1,400 crores from exiting international subsidiaries.

  • A one-time charge of ₹400 crores was incurred in Q4 for the exit of the foundry business.

  • Ongoing supply chain challenges, particularly with DRAMs, necessitate aggressive inventory building at higher costs.

  • April numbers were impacted by supply issues from two key suppliers, causing a shortfall of 7,000-8,000 units.

Key financials

2 periods

Headline

  • Consolidated PAT Growth (FY)
    35%
    YoY +35%
  • Consolidated Revenue Growth (FY)
    25%
    YoY +25%
  • ROE (FY)
    20%
  • Annualized EPS Growth (Last 5 Years)
    57%
  • Farm PAT Growth (FY, ex-impairments)
    36%
    YoY +36%

Q4, ex-contract mfg

  • Auto PBIT
    10.9%

What they filed

Q1 FY27: revenue up 22.9%, net profit up 6.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue28,919 30,964 31,609 34,143 35,080 +21%38,942 +26%39,601 +25%41,959 +23%
EBITDA5,270 4,894 4,938 4,944 6,520 +24%6,092 +24%5,611 +14%5,150 +4%
Net profit3,841 2,964 2,437 3,450 4,521 +18%3,931 +33%3,737 +53%3,685 +7%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Auto
    19% Volume Growth (Q4)80 bps Margin Increase (Q4)50% PBIT Growth (Q4 Consolidated)49% PAT Growth (Q4 Consolidated)33% PBIT Growth (FY Consolidated)33% PAT Growth (FY Consolidated)9.6% EV Penetration (FY)31.4% EV Volume Market Share22.9% ILCV Buses Market Share₹227 Cr Mahindra Electric PBIT (Q4)
  • Farm
    24% Volume Growth (Q4)150 bps Margin Increase (Q4)13% PAT Growth (FY)43.6% Tractor Market Share (FY)32% Farm Machinery Market Share Growth₹1,400 Cr Impairments (FY)
  • Mahindra Finance
    0.6% Profit Growth (FY, ex-provision release)12% AUM Growth (FY)3.4% GS3 (Q4)
  • Growth Gems
    50% Profit Growth (FY)₹298 Cr Real Estate Profit (FY)₹276 Cr Powerol Profit (FY)₹224 Cr Accelo Profit (FY)
  • TechM
    14% Profit Growth (FY)

Capital allocation

high confidence
  • Capex Capex disclosed
    • SUV ICE capacity expansion to 60,000 units (H1 exit), plus 10,000 units for NU_IQ products (F28) and 4,000 EV units (F28).
    • Nagpur plant for SUV production
    This is a slide on which I'll spend a little bit of time, and we can come back again if you need in the Q&A. So, we exited F25 with a ICE capacity of 54,000, and EV capacity of 5,000. During the year, we went up to 56,500 of ICE, and EV of 8,000. That's what we announced when we launched the 9S. We've not been able to fully operationalize the 56,500 because of changes in mix, and which is basically constrained by the engines that we needed. So, though we had a 56,500, we were not able to fully get 56,500. So, that mix issue is being sorted out, and as we get to H1 exit, which is by September, October, 56,500 would have gone up to 60. 8 will remain at 8. As we come to the end of the year, this on top of the 60, we would have added 10,000, which is towards the launch of the NU_IQ, which will be for products that will get launched in F28. We will add another 4,000 of EV for the new EVs to get launched in F28. So, through F28 beginning, we would really have 60 plus 8 plus 14. So, that would be the total SUV capacity that we are building up during the course of this year. The Nagpur plant is on track to get started in 2028 to middle.
  • M&A Sampo Divestment · Closed

    Exited businesses not delivering needed outcomes or strategic synergy.

    Aimed at improving international business profitability over next 2 years.

    We spoke, and Anish reinforced this. You know about it. We've taken action in areas which were not delivering the outcomes that we needed, or which were not going to derive strategic synergy as we were going forward. So, we have exited Sampo and Erkunt Foundry already in that stage of exit, and doing a voluntary liquidation for the Mitsubishi Ag Machinery business.
  • M&A Erkunt Foundry Divestment · Closed

    Exited businesses not delivering needed outcomes or strategic synergy.

    Aimed at improving international business profitability over next 2 years.

    We spoke, and Anish reinforced this. You know about it. We've taken action in areas which were not delivering the outcomes that we needed, or which were not going to derive strategic synergy as we were going forward. So, we have exited Sampo and Erkunt Foundry already in that stage of exit, and doing a voluntary liquidation for the Mitsubishi Ag Machinery business.
  • M&A Mitsubishi Ag Machinery business Divestment · Pending regulatory

    Voluntary liquidation for businesses not delivering needed outcomes or strategic synergy.

    Aimed at improving international business profitability over next 2 years.

    We spoke, and Anish reinforced this. You know about it. We've taken action in areas which were not delivering the outcomes that we needed, or which were not going to derive strategic synergy as we were going forward. So, we have exited Sampo and Erkunt Foundry already in that stage of exit, and doing a voluntary liquidation for the Mitsubishi Ag Machinery business.
  • M&A SML Acquisition · Integrated

    Strengthening position in trucks and buses segment.

    Integrations going very well right now, we've gained market share marginally also at this point and very well poised for the future.

    And trucks and buses, with the SML acquisition completed, integrations going very well right now, we've gained market share marginally also at this point and very well poised for the future.
  • Liquidity Cash ₹41,000 Cr Net cash generation of ₹16,000 crores for the year contributed to the cash balance.
    the overall net cash generation from the business was 16,000 crores, has added to our cash balance. After dividend, it's at 41,000 crores for the year

Guidance & targets

Profitability

  • EPS Growth Profitability · next 5 years · High confidence 15-20%
    if I were to look at the next 5 years again, we'd be very comfortable in saying that we will grow 15%-20% a year for the next 5 years.

    — Dr. Anish Shah

  • ROE Profitability · ongoing · High confidence 18%
    our target is 18. We will fluctuate a little higher and lower than 18. Thankfully, we'll be on the higher side right now. We might be lower at some point as well as we invest more. But our focus is to maintain 18% ROE while driving growth.

    — Dr. Anish Shah

Volume

  • Tractor Volume Growth Volume · F27 · High confidence mid-single digit, around 5%
    F27 Outlook, we are expecting tractor to be mid-single digit, around 5%.

    — Mr. Rajesh Jejurikar

  • SUV Volume Growth Volume · F27 · High confidence mid-to-high teens
    On the SUV side, we are expecting mid-to-high teens.

    — Mr. Rajesh Jejurikar

  • LCV (<3.5 ton) Volume Growth Volume · F27 · High confidence high single digits
    And on the LCV, less than 3.5 ton, it's high single digits.

    — Mr. Rajesh Jejurikar

Disbursements

  • AI-driven Disbursements (Mahindra Finance) Disbursements · this year · High confidence ₹10,000 crore more
    For this year, we expect to have 10,000 crore more of disbursements because of AI.

    — Mr. Rajesh Jejurikar

Product Launches

  • New SUV Launches (ICE & BEV) Product Launches · by F31 · High confidence 10 new ICE and 6 new BEVs
    So, by F31, we can expect 10 new ICE and 6 new BEVs.

    — Mr. Rajesh Jejurikar

  • New LCV Launches Product Launches · by F31 · High confidence 10 launches
    So, basically, by F31, we are expecting 7 plus 3, 10 launches in LCVs.

    — Mr. Rajesh Jejurikar

Listing

  • Last Mile Mobility Listing Listing · CY2027 · High confidence Calendar Year 2027
    What we have said publicly is in the sort of F27 end, F28 range. Actually, F28 to be more realistic than F27. So, Calendar Year 2027 is what I would look at.

    — Dr. Anish Shah

EV Penetration

  • EV Penetration for CAFE Targets EV Penetration · 5-year block · High confidence 13-21%
    Between 13 to 21. Over the 5-year block? Yeah.

    — Mr. Rajesh Jejurikar

What to watch in Q1 FY27

SUV Volume Growth

Next quarter
Current Mid-to-high teens guidance for F27
Target Achieving mid-to-high teens growth

Why it matters

To assess if product launches and capacity expansion can sustain growth despite a heavy base and potential price increases.

On the SUV side, we are expecting mid-to-high teens.

Risks & concerns

  • Supply Chain Disruptions (DRAMs)

    high

    DRAMs remain a difficult supply chain issue, requiring aggressive inventory building at higher costs.

    Management acknowledged

  • Supplier Shortages (Q1 FY27)

    high

    April numbers were impacted by shortages from two key suppliers, leading to a 7,000-8,000 unit shortfall, though one issue is resolved.

    Management acknowledged

  • Inflationary Impact on Commodity Prices

    medium

    Commodity price inflation could impact future quarters, but management is cautious about passing on full costs due to market dynamics.

    Analyst acknowledged

  • Fuel Price Increases

    medium

    Rising fuel prices could impact demand, though M&M's SUV customers are considered less sensitive.

    Analyst acknowledged

  • Supply Chain Disruptions (Gas)

    medium

    Gas supply was difficult but has stabilized in recent weeks and is not seen as a major disruptor currently.

    Management downplayed

  • Rainfall Deficit

    medium

    A potential rainfall deficit in August/September could impact the later part of the year for the farm sector.

    Management acknowledged

  • Base Effect for Tractor Growth

    low

    The high base from the previous year's second half will make growth harder for the tractor segment.

    Management acknowledged

Q&A highlights

7 direct
SUV Growth Guidance in Challenging Environment Direct
The confidence comes from the demand that we've seen for our products. The fact that our capacity also hasn't been at the level we wanted to... And it's a combination of all of that that gives us a high degree of confidence around that same mid-to-high teen number.

Analyst questioned the sustainability of mid-to-high teens SUV growth given heavy base, fuel price, and product price increases. Management attributed confidence to strong product demand and increasing capacity.

Asked by Mr. Chandru

Supply Chain Status (Gas & DRAMs) Direct
The DRAMs, we were anticipating this 3, 4 months back and we have got aggressively into contracting and buying long, long quantity, whatever we could. There is a huge inflationary impact in doing that. But we have focused on fortifying our supply so far and we will continue to even if there is an inflationary impact there.

Analyst sought an update on critical supply chain components. Management confirmed DRAMs remain a challenge requiring proactive inventory building, while gas supply has stabilized.

Asked by Mr. Chandru

Long-term EPS/ROE Targets vs Short-term Actions Direct
I'll just clarify the range first is longer term view, not a view specifically for this year, so if I were to look at the next 5 years again, we'd be very comfortable in saying that we will grow 15%-20% a year for the next 5 years. ... But we would do not try to manage the quarterly number or the annual number to say 'it should, therefore, fall into this category'.

Analyst questioned if pricing actions are used to meet short-term EPS/ROE targets. Management clarified these are long-term aspirational growth rates, and pricing decisions are strategic for category building, not quarterly management.

Asked by Mr. Chandru

BEV Growth Drivers and Consumer Sentiment Direct
EVs for us were not to be sold on economics but to be sold as lifestyle statements. That's where we started. ... Today as we talk to customers and dealers, the one thing that they say is your range is established. Customers believe it when you say that it's 450-500.

Analyst asked about the key drivers for sustained BEV demand. Management highlighted lifestyle positioning, established range confidence, operating cost savings, and improving charging infrastructure as crucial for consumer adoption.

Asked by Mr. Jay

Value Creation Potential in Unlisted Businesses and Listing Timelines Direct
Take aerospace, for example, in 1 or 3 years you will not see much of a change. But what we have seen is in the last 12 months, little more than 12 months, we've got a billion dollars of orders as compared to 150 million dollars of orders in 15 years or 12 years, whatever the time period was.

Analyst inquired about the highest incremental value creation potential among unlisted companies and their listing plans. Management highlighted aerospace's significant order book, real estate's profit growth, and the upcoming listing of Last Mile Mobility by CY2027.

Asked by Mr. Nitij

AI Implementation Strategy and Value Delivery Direct
what we did about a year and a half ago is everyone working on AI across the group we put in one team. ... I look at it more as Excel. We can't get someone external to come in and implement Excel, you've got to, in some ways, teach everyone Excel, get them comfortable with it and have them start using it for what they do day to day.

Analyst asked for practical insights into AI implementation and value realization. Management described a centralized team approach, focusing on empowering employees to use AI as a tool for efficiency and impact, rather than relying solely on external vendors.

Asked by Mr. Kapil

Tractor Volume Guidance and Market Dynamics Direct
Why are we saying mid- single digit? Because the first half of last year was still on a relatively low base, right. So, when you break up the annual volumes, roughly 35%-40% of the annual volumes happen in the first season. That was still on a low base. So, there is a growth opportunity on the first 40%.

Analyst questioned the F27 mid-single digit tractor growth guidance. Management explained it's an average of H1 (low base, growth opportunity) and H2 (high base, harder to grow), supported by government spending and non-agricultural income.

Asked by Ms. Gunjan

3 min read 8 chapters

Detailed narrative

Strong Q4 & FY26 Financial Performance

Mahindra & Mahindra reported a robust financial performance for Q4 FY26, with consolidated Profit After Tax (PAT) increasing by 42%, and for the full fiscal year, PAT grew by 35%. Revenue also saw significant growth, up 29% in Q4 and 25% for FY26. The company achieved a full-year Return on Equity (ROE) of 20%, surpassing its target of 18%, and delivered a 57% annualized EPS growth over the last five years. Net cash generation for the year stood at ₹16,000 crores, contributing to a healthy cash balance of ₹41,000 crores.

Auto Sector Momentum and EV Leadership

The Auto sector demonstrated strong momentum, with Q4 volume growth of 19% and an 80 basis points margin increase. For the full year, EV penetration reached 9.6%, exceeding 10% in the last two months of the fiscal year, and the company achieved the number one revenue market share for EVs. Mahindra Electric reported a PBIT of ₹227 crores in Q4, with full-year EBITDA at ₹1,314 crores and PBIT at ₹287 crores. The company plans to launch 10 new ICE and 6 new BEV SUVs by F31, alongside 10 new LCVs.

Farm Sector Resilience Amidst Strategic Exits

The Farm sector recorded a 24% volume growth and a 150 basis points margin increase in Q4. Despite these gains, the sector's full-year PAT growth was limited to 13% due to impairments of ₹1,400 crores from exiting international subsidiaries like Sampo, Erkunt Foundry, and Mitsubishi Ag Machinery. Excluding these impairments, the Farm sector's profit growth would have been 36%. The company achieved its highest-ever tractor market share of 43.6% and saw farm machinery market share grow by 32%.

Mahindra Finance & Growth Gems Outperformance

Mahindra Finance delivered a 60% profit growth year-over-year (excluding prior year provision release) and maintained strong asset quality with a Q4 GS3 of 3.41%. The company's Growth Gems collectively increased profit by 50% year-over-year, with TechM contributing 14% profit growth. Aero structures secured over $1 billion in orders in just over a year, significantly up from $150 million over the prior 15 years. Real Estate reported a profit of ₹298 crores this year, while Powerol and Accelo contributed ₹276 crores and ₹224 crores respectively.

Strategic Focus on AI for Value Creation

Mahindra & Mahindra is aggressively implementing a three-pronged AI strategy focusing on 'deploy' (small, quick impact), 'transform' (large projects with change management), and 'invent' (AI-first processes). The company aims to leverage AI to enhance efficiency, improve customer experience, and drive revenue growth. For Mahindra Finance, AI is expected to contribute an additional ₹10,000 crores in disbursements this year. The goal is to be a tech leader in each industry, ensuring AI delivers tangible value across the business.

Capacity Expansion & Product Pipeline

The company is actively expanding its SUV capacity, targeting 60,000 ICE units and 8,000 EV units by H1 FY27, with further additions of 10,000 units for NU_IQ products and 4,000 EV units for F28. The Nagpur plant is on track to commence operations in 2028. M&M has a robust product pipeline, planning 10 new ICE and 6 new BEV SUVs by F31, and 10 new LCVs by F31, with many coming from the new NU_IQ platform.

Capital Allocation and Shareholder Returns

M&M's strong net cash generation of ₹16,000 crores for the year has bolstered its cash balance to ₹41,000 crores. The company declared a 30% increase in dividend this year, aligning with its profit growth. Strategic capital allocation included exiting non-performing international farm businesses (Sampo, Erkunt Foundry, Mitsubishi Ag Machinery) and completing the SML acquisition to strengthen its trucks and buses segment, aiming to improve overall profitability and shareholder value.

Macroeconomic Outlook and Supply Chain Challenges

Management expressed a bullish outlook on the Indian economy, citing strong consumption, infrastructure development, and economic reforms. However, the company acknowledges ongoing macroeconomic uncertainties, including inflationary pressures from commodity and fuel prices. Supply chain disruptions, particularly for DRAMs, persist, necessitating aggressive inventory building. The April numbers were impacted by shortages from two key suppliers, leading to a 7,000-8,000 unit shortfall, though one issue has been resolved.

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