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Informist, Friday, Sept. 11, 2026

 

KOLKATA – Mahindra and Mahindra Ltd. group company SML Mahindra Ltd is banking on future price hikes and cost control measures to recover its operating margins by the March quarter, a senior company official said. Global commodity inflation resulting from the West Asia war had pulled up its raw material costs which impacted margins. 

 

"Only on material cost, it (increase) has been in the range of 5-6% for all automotive players including us. We have taken almost similar price increase but it happened in phases and some of it in terms of market operating price has still not happened. So, it will take another quarter also to fully pass on," Vinod Sahay, executive chairman of SML Mahindra Ltd., told mediapersons on the sidelines of the launch of its BLAZO i-TRK heavy commercial vehicle range Thursday late evening.

 

Sahay who is also president of aerospace, advanced technologies, and trucks and buses business verticals at Mahindra and Mahindra, said that till now the company has been able to pass on 2.5% of the cost inflation and the rest was yet to be covered. 

 

"We are not dependent upon only price increase. We are parallelly working on lot of cost efficiency measures. So, we are very hopeful that by Quarter 4 (March quarter), by the combined effect of both, we will be able to negate and get back to our original margin," he said. 

 

Although Sahay did not state what the normal operating margins are, sector analysts estimate that the company's earnings before interest, tax, depreciation, and amortisation margins in the June quarter declined to 10.5% as against 12.4-12.7% in the year-ago quarter. The latter is usually considered the normal ballpark margin for SML Mahindra. 

 

Sahay, who is also a member of the Mahindra group's executive board, said future price increases would be in a calibrated manner and will depend on how the market leader in the commercial vehicles segment increase their prices. 

 

"The market dynamics and industry also has to support it (price hikes). I cannot standalone do it as I am not even a leader in this category. We are following the industry leaders on this (price hike)," Sahay said.

 

SML Mahindra had implemented a price hike of around 2?ross its vehicle portfolio in May, but the increase was not sufficient to fully offset input cost inflation during the first quarter.

 

Apart from higher raw material prices, sector analysts also attribute rising employee costs and transition related business expenses to have affected SML Mahindra's June quarter margins. 

 

In July, Mahindra & Mahindra's board approved the sale of its truck and bus division to its listed subsidiary SML Mahindra on a slump-sale basis for INR 5.25 billion. The transaction paves the way for the automotive major to create a unified truck and bus business under SML Mahindra, which it had acquired a year ago from Sumitomo Corp. and Isuzu Motors Ltd. for a 58.97% stake.

 

Sahay said that following the execution of the business transition, the commercial vehicles manufacturing plants under Mahindra and Mahindra will not be merged with SML Mahindra. The former's plants, however, will undertake contractual vehicle manufacturing for SML Mahindra. 

 

"SML Mahindra has only one plant. Mahindra and Mahindra makes trucks and buses in two places...Both will continue as it is, and Mahindra and Mahindra will undertake contract manufacturing post-merger," the official said.

 

On electric vehicles, he said SML Mahindra is currently working on an electric bus, which is slated for launch by the March quarter or June quarter of the coming financial year. The planned electric bus will primarily cater to the staff and school transportation segments rather than the urban city bus market, he said.

 

The company has also started initial development of an electric truck as well. 

 

Thursday, shares of SML Mahindra closed 4.4% down at INR 6,278.00 and those of Mahindra and Mahindra closed 0.8% down at INR 3,123.80 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Avishek Rakshit

Edited by Akul Nishant Akhoury

 

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