Mahindra & Mahindra , one of India's leading automotive and farm equipment manufacturers, has reported strong financial results for the first quarter, demonstrating resilience and growth across its key business segments.

Financial Highlights

• Consolidated Profit After Tax (PAT) grew by 24% to ₹4,083.00 crores
• Return on Equity (ROE) reached 20.6%, surpassing the 20% mark for the first time
• Consolidated revenue increased by 22%

Automotive Segment Performance

• SUV volumes surged by 22%, with revenue market share expanding to 27.3%, up 570 basis points
• Auto business maintained a 10% margin, excluding Electric SUVs
• Light Commercial Vehicle (LCV) market share improved to 54.2%

Farm Equipment Sector (FES) Highlights

• Tractor volumes grew by 10%
• Market share in the tractor segment increased by 50 basis points to 45.2%
• Farm PBIT (Profit Before Interest and Tax) margin stood at 19.8%

Electric Vehicle (EV) Progress

• Electric SUV business showed improved profitability with EBITDA of ₹111.00 crores end-to-end
• EV penetration reached close to 8% of total SUV sales

Other Business Highlights

• Tech Mahindra's EBIT margin recovered to 11.1%, with a target of 15% for FY27
• Mahindra Finance maintained asset quality focus with 3.8% levels and 15% growth in Assets Under Management

Market Challenges and Outlook

Despite the strong performance, Mahindra & Mahindra faces some headwinds:

• Steel price increases of 6% over the last quarter
• Urban market slowdown, although rural sentiment remains better

Dr. Anish Shah, Group CEO & MD of Mahindra & Mahindra, commented on the results, stating, "It was a very strong quarter overall. We've had a number of strong quarters for some time now, but I would look at this as amongst the strongest."

The company maintains its guidance for mid to high teens SUV growth, despite the challenging demand environment. Mahindra & Mahindra's focus on innovation, market expansion, and operational efficiency continues to drive its performance across various segments.

With a robust product pipeline and strategic investments in electric mobility, Mahindra & Mahindra is well-positioned to navigate market challenges and capitalize on growth opportunities in the evolving automotive and farm equipment sectors.

Mahindra & Mahindra , one of India's leading automotive manufacturers, is taking proactive steps to address the potential shortage of rare earth magnets caused by China's export restrictions. The company is implementing a two-pronged approach, focusing on alternative sourcing channels and engineering solutions to mitigate the impact on its production and future growth plans.

Short-Term Measures and Inventory Management

Group CFO Amarjyoti Barua has reassured stakeholders about the company's preparedness for the immediate future. According to Barua, Mahindra & Mahindra has successfully built up its inventory through alternative sources, ensuring a buffer against potential supply disruptions. This strategic move is expected to shield the company from major risks for the next nine months.

Long-Term Strategy and Engineering Solutions

While the company's short-term needs are addressed, Mahindra & Mahindra acknowledges that its ambitious growth plans require more substantial long-term solutions. The automotive giant is now focusing on developing engineering alternatives to manage the shortage beyond the current tactical measures. These efforts are crucial for sustaining the company's expansion, particularly in the electric vehicle (EV) segment.

Impact on the Automotive Industry

The shortage primarily affects neodymium-iron-boron magnets, which are essential components in electric vehicle traction motors and power steering systems. This issue has raised concerns across the automotive sector, with rating agencies Icra and Crisil previously warning that industry inventories of these critical magnets could be depleted by mid-July, posing significant supply chain risks.

Industry-Wide Concern

Mahindra & Mahindra is not alone in facing this challenge. Other major players in the Indian automotive market, including Maruti Suzuki and Hyundai Motor India, have also acknowledged the shortage. However, these companies have reported no immediate impact on their production schedules.

Looking Ahead

As Mahindra & Mahindra continues to navigate these supply chain challenges, the company's proactive approach in securing alternative sources and developing engineering solutions demonstrates its commitment to maintaining production stability and supporting its growth trajectory. The success of these initiatives will be crucial not only for Mahindra but also for the broader Indian automotive industry as it transitions towards increased electrification and sustainable mobility solutions.

The company's ability to manage its supply for FY26 is a positive sign, but the ongoing efforts to develop more robust, long-term solutions will be key to watch in the coming months and years.