Mahindra & Mahindra (M&M), a leading Indian multinational automotive manufacturing corporation, has reported a stellar performance for the second quarter, with consolidated profit surging 28% year-over-year. The company's impressive results were driven by strong growth across all business segments, particularly in its farm and auto divisions.

Farm Business Leads the Charge

M&M's farm business emerged as the star performer, with a remarkable 54% profit growth. This exceptional performance was fueled by robust tractor volumes, which increased by 32% compared to the same period last year. The company also gained 50 basis points in market share, further solidifying its position in the agricultural machinery sector.

Auto Segment Shows Resilience

Despite facing challenges due to the GST transition, which delayed vehicle deliveries from September 8th onwards, the auto business managed to achieve a commendable 14% profit growth. M&M gained significant ground in the auto market, with a 390 basis point increase in revenue market share year-over-year. The company also maintained its strong position in the Light Commercial Vehicle (LCV) segment, holding a 53.2% market share.

Electric SUV Penetration on the Rise

M&M's commitment to electric mobility is evident in its growing electric SUV penetration, which reached 8.7% with cumulative sales of 30,000 electric SUVs. This progress underscores the company's focus on sustainable transportation solutions and its ability to adapt to changing market demands.

Financial Services and Tech Segments Shine

Mahindra Finance demonstrated breakthrough performance with a 45% profit growth and improved asset quality, with Gross Non-Performing Assets (GNPA) falling below 4%. Tech Mahindra, the company's IT services arm, delivered an impressive 35% operating profit growth, contributing significantly to the overall results.

Strategic Acquisitions and Cash Flow Management

The company completed the acquisition of SML, further strengthening its portfolio. Despite significant capital expenditure and dividend payments, M&M maintained strong cash flow generation, highlighting its efficient financial management.

Outlook and Management Confidence

Management expressed confidence in achieving double-digit growth for the LCV and tractor segments, supported by recent GST rate reductions. This optimistic outlook reflects the company's strong market position and its ability to capitalize on favorable industry trends.

Financial Highlights

M&M's robust performance across all business segments demonstrates the company's resilience and strategic acumen in navigating a complex market environment. With strong growth in its core auto and farm businesses, coupled with impressive gains in electric vehicle penetration and financial services, Mahindra & Mahindra appears well-positioned for continued success in the coming quarters.

Mahindra & Mahindra (M&M), a leading Indian multinational automotive manufacturing corporation, has announced ambitious goals and reported strong performance across various segments, signaling optimism in its growth trajectory.

Global Ambitions and Financial Performance

Mahindra Group CEO Anish Shah, speaking at the SBI Banking & Economics Conclave, announced the company's goal to become one of the world's top 50 most admired companies. The group reported robust quarterly performance with significant year-on-year growth across divisions:

• Farm division profits: Up 54%
• Mahindra Finance: Up 45%
• Tech Mahindra: Up 35%
• Growth gems: Up 22%
• Auto business: Up 14%

Notably, auto exports increased by 40%, with the company targeting 10-20% market share in key global markets.

Investment Plans and Subsidiary Growth

Mahindra has allocated ₹30,000-40,000 crore for capital expenditure and R&D over the next three years. The company highlighted impressive growth in subsidiaries:

• Mahindra Aerostructures: Expected to grow 20-fold
• Holiday segment: Operating 100 resorts in India and 35 in Europe

Revised Growth Projections

M&M has made significant adjustments to its growth forecasts across multiple segments:

The tractor segment shows the most notable change, with M&M substantially raising its growth guidance from 5-7% to 10-12%. This significant upward revision suggests strong momentum in the agricultural sector and increased demand for farm equipment.

For the SUV segment, M&M maintains its mid to high-teens growth outlook, indicating continued confidence in the robust demand for its sport utility vehicles. The Light Commercial Vehicles (LCV) segment is expected to deliver low double-digit growth, reflecting positive expectations in the commercial transportation sector.

Financial Performance Expectations

M&M expects its Return on Equity (ROE) to remain steady at around 18%, suggesting a consistent level of profitability and efficient use of shareholders' equity.

Market Implications and Future Outlook

The revised guidance, particularly the significant boost in the tractor segment forecast, may be seen as a positive indicator for both M&M's business prospects and the broader agricultural sector. The maintained outlook for SUVs and the positive projection for LCVs also point to M&M's strong position in these competitive markets.

Anish Shah emphasized that India has the potential for 8-10% annual growth over the next 20 years, supported by demographic strength and infrastructure development. This optimistic view aligns with Mahindra Group's ambitious goals and investment plans.

As Mahindra & Mahindra continues to navigate the evolving market dynamics, its ability to meet or exceed these growth projections will be crucial in maintaining investor confidence and market position. Investors and market analysts will likely watch closely to see how these projections and ambitious plans translate into actual performance in the coming quarters, especially given the current economic landscape and competitive automotive market in India.