Mahindra surges ahead of industry, brushing aside slowdown concerns

New Delhi: Mahindra and Mahindra Ltd shrugged away concerns over the slowdown in the domestic car market as it outpaced the rest of the industry’s growth in the previous financial year.

India’s fourth-largest passenger vehicle maker saw its revenue in the traditionally slow March quarter surge 20% year-on-year to ₹42,599 crore and profit increase by a fifth to ₹3,295 crore.

For the full financial year (2024-25), Mahindra’s revenue climbed 14% to ₹1.59 trillion and profit by 15% to ₹12,929 crore on the back of a surge in sales of sports utility vehicles (SUVs), a market the company dominates with a 23% share. 

Sales volume jumped 20% to 551,000 in FY25, as against the industry’s 2% growth.

Mahindra Group managing director and chief executive Anish Shah remained sanguine about the domestic car market, expecting the blip in urban demand to pass shortly. 

“The sentiment is positive in the market,” Shah said during a post-earnings media briefing on Monday. “Along with a SUV-led portfolio, the quality of the products being rolled out by our team is also receiving strong interest from consumers,” he added.

Mahindra’s inventory is also under control at less than 30 days as against the industry average of about 50 days, indicating strong sales.

The commentary from Mahindra’s management is in contrast with Maruti Suzuki India Ltd’s skeptical observations about the domestic car market.

“Growth in the domestic market has been very limited. For a country with such low penetration of cars, the growth rate of 2-3% is not going to increase it at all. It is a matter of some worry,” R.C. Bhargava, chairman of Maruti Suzuki, said during the company’s post-results media briefing last month.

Maruti Suzuki, India’s largest seller of passenger vehicles with a 40% market share, reported a 3% year-on-year growth in domestic car sales to about 1.9 million units in 2024-25. Net profit increased 7.5% to ₹14,500 crore and revenue by 7.7% to ₹1.53 trillion.

“Unless something changes, the domestic market will remain muted. In this current year, sales of small cars have declined by about 9%. If there is such a decline in the sales of cars that can be afforded by 88% of people earning, how can we expect growth?” Bhargava said during the media briefing.

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Mahindra more optimistic

Mahindra has a different assessment of the domestic car market.

“With interest rates coming down and income tax benefits kicking in, the demand sentiment in the urban market should improve in the next few months,” Rajesh Jejurikar, executive director and CEO, auto and farm sectors, Mahindra Group, said during the briefing.

The company is also witnessing robust demand in the electric vehicle segment, with over 30,000 bookings received for its two newly launched SUVs.

As of 3 May, the company had delivered 6,300 electric vehicles. As per Mahindra’s management, the waiting time for the company’s electric vehicles is 4-5 months.

“We are focused on gaining revenue market share in the segment. Average prices of our electric vehicles are higher compared to others,” Jejurikar said. Mahindra has leaped to the top of the passenger electric vehicle market with a 33.2% revenue share.

Investors have taken cues from the difference in the performances of Maruti Suzuki and Mahindra. While Maruti Suzuki’s share price declined 8.5% in FY25, Mahindra’s shares surged by over 38% during the fiscal year. 

On Monday, Mahindra’s shares gained 3.34% to close at ₹3,024.00 on NSE, while the Nifty Auto index rose 1.85%.

Also read | Maruti Suzuki's struggle for dominance: Is the EV pivot enough to reclaim market share?