Analyst Concall
M&M will continue with 18% return on equity, mgmt says
This story was originally published at 19:26 IST on 11 February 2026
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--M&M: Company will continue with 18% return on equity
--CONTEXT: M&M management's comments in post-earnings concall with analysts
--M&M: Debottlenecking for capacity addition at Chakan, Nashik facilities
--M&M: Expect PLI approval for all relevant products, variants by Q1
--M&M: Expect commercial segment to gain most from GST rate cuts
--M&M: See more enablers than disablers for tractor demand in FY27
--M&M: Tech Mahindra on track to deliver 15% EBIT margin by FY27
--M&M: Currently see more benefits from FTA with EU than from US trade deal
--M&M: Not seeing any EV-specific supply chain disruption currently
--M&M: Working to be compliant with Bharat Stage 7 emission norms
--M&M: Scrambling to increase tractor capacity, should be covered for FY27
By Shakshi Jain and Gunjan Rajput
NEW DELHI/MUMBAI – Mahindra & Mahindra Ltd. will continue with its target of 18% return on equity even as the company's annualised return on equity for the first nine months of 2025-26 (Apr-Mar) reached 20.1%, Group Chief Executive Officer and Managing Director Anish Shah said in a post-earnings conference call with analysts Wednesday. "...the new bar is not 20(%). We will continue with 18(%) plus, minus a little bit, and we'll continue to drive growth," Shah said.
The company reported a net profit of INR 39.31 billion for the December quarter, up around 33% on year. Its revenue from operations for Oct-Dec rose over 26% on year to INR 385.17 billion, the highest pace of on-year revenue growth in 11 quarters. For the nine months ended December, the company's net profit rose over 26% on year to INR 119.02 billion and revenue from operations grew over 24% on year to INR 1.06 trillion.
The management said Mahindra & Mahindra Financial Services Ltd. was on a strong track and has pivoted to growth while the company's information technology services arm Tech Mahindra Ltd. was on track to deliver 15% earnings before interest and tax margin by the end of FY27 as targeted under the Project Fortius plan. "As it does that then we will look at pivot to growth from that standpoint as well," the management added.
In the automobile business, the company will work towards de-bottlenecking at the Nashik and Chakan plants in 2026--to improve capacity for offerings where current production capacity is running out, specifically XUV 3XO, Bolero, Scorpio, and Thar. The company aims to add a capacity of 3,000-5,000 units per month for these products by Jul-Aug. "Over and above that 3,000 of EVs get added with the 9S launch. So in a way 6,000 to 7,000 additional capacities on these products get added in FY27 on top of what we have in FY26," the management said.
The management affirmed that the company was not seeing any EV-specific supply chain disruption currently. Overall, the company is working to be compliant with Bharat Stage 7 emission norms. Mahindra & Mahindra expects to receive approval for financial incentives under the Production-Linked Incentive scheme for the Mahindra XEV 9S Pack One Above and Pack Two Above, and all the variants of the Mahindra BE 6, by the first quarter of FY27.
In the tractors segment, the company is scrambling to improve capacity and believes it should be covered for FY27. "...it's tight, honestly, because we were not prepared for 25% growth this year," the management said. The company's upcoming greenfield factory in Nagpur, Maharashtra, which is expected to start production in 2028, is slated to have an annual production capacity of 100,000 tractors over time.
Commenting on demand for tractors in the coming financial year, the management said, "...many of you are picking up signals that tractor demand may be under stress...we think right now the enablers (for demand) are much more than the disenablers. At least that's the way we are going in and which is why we are triggering capacity expansion."
The company's farm equipment segment, which comprises sale of tractors, implements, spares, and related services, posted a 25% on-year rise in its revenue for the December quarter. The segment revenue was INR 102.00 billion, which accounted for over 26% of the company's overall top line, for the quarter.
From the recent goods and services tax rate cuts, the company expects the commercial segment to benefit the most. "...the biggest impact of GST (cut) will always be in commercial segments because it's fundamentally a price reduction. Because it fundamentally improves cost of ownership and improves viability," the management said, adding that in other segments, the GST cuts will enable a shift to higher variants.
Answering a question on benefits for the company from the free trade agreement with the European Union and the trade deal with the US, the management said it sees many benefits from the deal with EU. "We see a lot of benefits from the EU FTA in particular. The US FTA actually was a surprise in many ways. It doesn't really give much to the US from an auto standpoint the way it's drafted right now is what we have seen. We will wait for the details to come in," the management said.
On Wednesday, shares of M&M ended flat at INR 3,674.90 on the National Stock Exchange. End
Edited by Akul Nishant Akhoury
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