At a glance

SML Isuzu reported a Q4 FY25 net profit of ₹52.95 crore, up from ₹52.32 crore YoY, while FY25 profit grew 13% YoY to ₹121.67 crore. Revenue rose to ₹2,399 crore in FY25 vs ₹2,196 crore in FY24. But that’s not even the big story. The real masala? Mahindra is acquiring 85 lakh shares from Sumitomo and Isuzu, followed by a ₹1,554.60 per share open offer! That’s a 2.4x jump from CMP levels. And yes — they’re also paying ₹18/share dividend.

🏢 About the Company

SML Isuzu Ltd manufactures light and medium commercial vehicles (LCVs, trucks, buses) in Punjab. Once known as Swaraj Mazda, it later became a JV between Sumitomo Corp and Isuzu. And now? It’s getting hitched to Mahindra & Mahindra, potentially becoming the latest commercial vehicle shaadi on Dalal Street.

👑 Key People Updates

• Outgoing Hero: Mr. M.S. Ramta (ED-Works) ends his tenure on 31st May 2025.
• Incoming (sort of):
  • Sandeep Chandna: CGM-Production (ex-Ashok Leyland, Tata Motors, Hero Honda)
  • Vikas Sharma: CGM-R&D (40 years at SML Isuzu — literal living archive)
• Auditor Appointment: M/s A. Arora & Co. to be Secretarial Auditor for FY26–30

📊 Financial Highlights (₹ in Crore)

🔥 Key Highlights:

• FY25 PAT up 13% YoY.
• Final dividend of ₹18/share (180%).
• EBITDA margin ~11.6%.
• Mahindra buying 59% at ₹650/share, then offering ₹1,554.60/share in open offer.

📦 Balance Sheet Check (FY25 vs FY24)

🔍 Red Flags:

• Cash position collapsed from ₹35 Cr to ₹3 Cr.
• Trade receivables ballooned 57% YoY — working capital pressure?

💰 Cash Flow Statement (FY25)

🪙 Translation:
They made decent operating cash but wiped it clean through dividend payout and debt repayment.

🏎️ Mahindra’s Grand Entry — What You Must Know

Deal Summary:

• Sumitomo (44%) and Isuzu (15%) are selling their entire stake to Mahindra & Mahindra at ₹650/share.
• Mahindra will trigger an open offer for 26% more at ₹1,554.60/share (holy premium, Batman!)
• Total control could go to Mahindra Group if offer succeeds.

EduInterpretation:

• CMP ≈ ₹660, Offer Price = ₹1,554.60 — that’s 2.4x premium.
• Mahindra could transform SML into a compact CV rival to Tata Motors and Ashok Leyland in the sub-5-ton segment.
• Isuzu’s diesel tech + Mahindra’s EV push? Hmm. Interesting combo.

🧠 EduInvesting Take

This isn’t just a financial result. It’s a generational transition.

SML was once a sleepy, Punjab-based CV maker surviving on modest truck and bus sales. But now, Mahindra’s entry, a mega open offer at more than 2x the CMP, and consistent YoY profit growth means this could go from dusty depot to spotlight superstar.

Of course, some skeletons remain in the closet (anonymous dealer complaint, working capital stretch, low cash balance), but the Mahindra magic could clean up the house.

Also, with Vikas Sharma back (after retiring 3 months ago!), looks like the company believes in “recycling” talent better than its trucks recycle emissions.

🚨 Risks & Red Flags

• Open offer at ₹1,554.60 may not go through fully if SEBI/RBI flags arise.
• Operating cash has been drained by dividends and working capital.
• SML’s product portfolio is still limited compared to Tata or Ashok Leyland.
• Anonymous employee-dealer collusion complaint under probe (though cleared for now).

📈 Forward Outlook

If Mahindra’s open offer completes and integration begins:

• Expect tech upgrades, EV ambition, and platform synergies.
• With the right push, this can become a ₹5,000 Cr+ revenue CV player in 3–5 years.

But if the offer fails? Meh, then it’s back to the same boring bus.

🏷️ Tags:

SML Isuzu Q4 Results, SML FY25 Earnings, Mahindra Open Offer, Sumitomo Exit, Commercial Vehicle Stocks India, Truck Manufacturers India, Isuzu Mahindra Deal, SML Dividend FY25, EduInvesting

🖋️ Prashant Marathe | 🗓️ 30 May 2025
EduInvesting — Where Stocks Are Roasted, Not Just Rated.