Mahindra set to report strong earnings after overtaking key rivals

Despite past market share losses to Tata Motors, the company is determinedly challenging the segment's giants.

Shah took over on 1 April 2021, just after the conclusion of a financial year when the company lost the third spot to Tata Motors Ltd. Its market share had declined by 2% and sales fallen below 200,000 units, as per the Federation of Automobile Dealers Association (Fada).

Also read: Electric bus makers set for a joyride as Delhi eyes full fleet electrification

Fast forward to April 2025, the maker of popular SUVs like XUV700, Scorpio N, and Thar ROXX overtook both Tata Motors and Hyundai Motor India Ltd to emerge as the second-largest automaker of the country. Clearly, some things, particularly in the SUV segment, are clicking for the company.

Market leader Maruti Suzuki Ltd registered a growth of about 44% in retail sales of cars between financial years 2021 and 2025. Hyundai Motor India and Tata Motors posted growth of about 35% and 186%, respectively. Mahindra, with a nearly 303% growth, beat them all during this period.

With the company challenging the leaders in the space with its performance, it has the task of scaling up electric cars where it made a late entry.

The January-March quarter was also a good one for the company. It sold about 150,000 passenger vehicles in the country as against 126,000 in the year-ago period, led by strong SUV sales.

With a strong presence in multiple segments, including three-wheelers, four-wheelers and tractors, the company wants to expand its presence in the truck and buses segment through the acquisition of Chandigarh-based SML Isuzu. The Mahindra Group will now expand in a big way into the electric bus space.

Also read: Renault India aims to triple market share with five new cars, expanded network

Mahindra and Mahindra Ltd will announce its January-March quarter results on 5 May, Monday. 

Mint lists five things which will be worth watching for when the company declares its financial results.

Revenue

As per the average of three analyst estimates, the company's revenue is expected to surge 18% to ₹29,742 crore during the quarter.

Analysts attribute this surge to increasing sales volume in a quarter where other original equipment manufacturers (OEMs) struggled to register strong growth.

“MM seems to be best placed among OEMs as both its core underlying segments, SUVs and tractors, outpaced peers. It has reported volume growth of 15% YoY, led by 23%/18% YoY growth in tractors/automotive," analysts at Motilal Oswal wrote in a 7 April note.

Management’s commentary on how price hikes and recent acquisition of SML Isuzu would help in growth will be key things to watch out for.

Profitability

Profit after tax is expected to increase by nearly 15% during the quarter to ₹2,300 crore, as per average estimates from three analysts.

Some analysts predict compression in margins in the auto segment due to the ramp-up of electric passenger vehicle manufacturing.

“EBIT margin to decline QoQ to 17.0% for the farm segment on lower operating leverage, and to decline to 9.1% for the auto segment due to impact from contract manufacturing margin for the e-PV segment," HDFC Securities wrote in an 11 April note.

A key highlight in management commentary will be how the recent acquisitions, price hikes and hit on margins due to electric vehicle (EV) production will impact profitability going forward.

EV Playbook

Mahindra and Mahindra is increasing its focus on the electric vehicle segment with presence now in electric three-wheeler, four-wheeler and commercial vehicle space as well through entry in the electric bus space.

The company began the bookings of its two new electric SUVs XEV 9e and BE 6 in February and claimed to have received more than 30,000 bookings on day one.

Also read: Indian consumers are not too psyched about electric cars: Study

Management’s commentary on how the bid to expand into the electric vehicle space is progressing will be closely watched along with when it plans to complete the deliveries of all the bookings.

Rural Play

Given its dominant presence in rural areas through the tractor space, the company's commentary on demand signals in rural areas will be closely tracked.

The expectations this year are of a normal monsoon, which can lead to a good sowing season, resulting in an income boost for farmers. As per Fada data, the company's tractor sales grew by just around 3% during the year.

Expectations on growth in this area will give an idea about the health of the rural economy, which has been closely watched due to the impact on sales of auto companies.

Competition Watch

Mahindra overtaking Hyundai and Tata Motors was a significant development in the month of April.

While both Tata Motors and Hyundai witnessed a decline in sales of their vehicles in April, Mahindra witnessed a growth in sales of 28% to more than 52,230 units in the domestic market. Tata Motors and Hyundai Motors witnessed a decline in sales to about 45,532 units and 47,993 units, respectively.

However, the management’s comments on the development and how it plans to defend its position against both will be a key highlight after the results.