M & M

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.

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.

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 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.

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.

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.

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.

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.