Demand stays strong, margin trajectory key for M&M

THE COMPASS

- DEVANGSHU DATTA

Mahindra & Mahindra (M&M) delivered the third quarter of 2025-26 (Q3FY26) results more or less in line with consensus estimates. Trends in the automobile segment look strong. Tractors could continue to log high volume growth, given recovery of demand in rural areas.

The company is pushing its electric vehicle or EV exposure and this may have some negative impact on margins.

Revenue grew 26.1 per cent year-on-year (Yo-Y) to ₹38,500 crore, with lower average selling price or ASP growth in the auto segment. The overall operating profit margin expanded 100 basis points Yo-Y to 14.7 percent. The operating profit grew 27 per cent Yo-Y to 5,670 crore. The Q3FY26 net profit at ₹4,000 crore was in line with estimates.

The FES (farm equipment) segment margin rose 210 basis points Yo-Y to 20.2 per cent, while auto margin was maintained at 9.5 per cent. Analysts are looking at revenue growth at high teens through the mid term, with similar growth rates in operating and net profit. The company has reiterated its commitment to 15-20 percent earnings per share or EPS growth and 18 percent return on equity (RoE).