At a Glance
Mahindra & Mahindra (M&M) just dropped Q1 FY26 results and they’re as muscular as their Scorpio-N. Consolidated revenue jumped 22% YoY to ₹45,529 Cr, while PAT zoomed 24% to ₹4,083 Cr. SUV volumes surged 22% with market share gains, and tractors held strong at 45.2% share. Margins stayed steady at 18%, proving that Mahindra is managing cost pressures like a pro. At ₹3,209, the stock trades at 29x earnings – not cheap, but who said SUVs were cheap either?
Introduction
M&M isn’t just a carmaker anymore; it’s a conglomerate with its wheels spinning everywhere – SUVs, tractors, EVs, financial services, hospitality, even aerospace. Founded in 1945 by the Mahindra brothers, the company went from assembling Willys Jeeps to dominating Indian roads with rugged SUVs.
In Q1 FY26, M&M flexed its auto dominance despite global auto slowdowns. SUV sales soared, tractors maintained leadership, and its EV plans are revving up. Add Tech Mahindra’s steady (but margin-challenged) IT business, and you’ve got a multi-engine growth story. But with a low promoter stake (18.4%) and high valuations, is this ride too pricey?
Business Model (WTF Do They Even Do?)
M&M is India’s most diversified auto major, operating across:
- Auto Division – SUVs (XUV700, Scorpio, Thar), pickups, 3-wheelers, EVs.
- Farm Division – World #1 tractor manufacturer.
- Subsidiaries – Tech Mahindra (IT), Mahindra Finance (NBFC), Club Mahindra (hospitality), aerospace, and defense.
- New Bets – Electric SUVs, last-mile mobility, and energy solutions.
Unlike pure-play auto companies, M&M’s profits come from a cocktail of businesses, making it resilient to cyclic downturns. When tractors slow, SUVs pick up the slack, and vice versa.
Financials Overview
Q1 FY26 numbers revved higher:
- Revenue: ₹45,529 Cr (+22% YoY)
- Operating Profit: ₹8,228 Cr (OPM 18%)
- PAT: ₹4,083 Cr (+24% YoY)
- EPS: ₹32.8 (TTM EPS ₹110.4)
For FY25, revenue hit ₹1.67 lakh Cr, PAT ₹14,073 Cr, and margins remained a healthy 19%. ROE is strong at 18%, ROCE at 13.9%. Growth is firing on all cylinders, but debt is also rising, now at ₹1.29 lakh Cr.
Valuation
Time to break it down:
1. P/E Method
Industry P/E (auto diversified): ~25x
TTM EPS: ₹110.4
Fair Value = 25 × 110.4 = ₹2,760
2. EV/EBITDA Method
EV/EBITDA multiple: ~12x
FY25 EBITDA: ₹31,503 Cr
Debt: ₹1,29,025 Cr | Cash: negligible
EV = 12 × 31,503 = ₹3,78,036 Cr
Equity Value ≈ ₹2,49,000 Cr
Fair Value per share ≈ ₹2,400
3. DCF
Assume 10% FCF growth, discount 12%, terminal 3%.
Intrinsic Value ≈ ₹3,000
Fair Value Range: ₹2,400 – ₹3,000
(Current price ₹3,209 is slightly overvalued but justified for growth bets.)
What’s Cooking – News, Triggers, Drama
- SUV market share up, volume +22%.
- EV division preparing XUV.e series launch – investors drool.
- Tractor market share 45.2% – unshaken dominance.
- Tech Mahindra EBIT margin 11.1% – still weak.
- Promoter stake is just 18.4%, raising takeover speculation in bullish circles.
- Loss of lead independent director Mr. T.N. Manoharan – governance vacuum to watch.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 2,76,013 |
| Liabilities | 1,99,532 |
| Net Worth | 76,481 |
| Borrowings | 1,29,025 |
Auditor’s Take: Debt is chunky, but cash flows are strong. Balance sheet built like a Thar – rugged but slightly overloaded.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops CF | 9,248 | -7,074 | 3,176 |
| Investing CF | -8,866 | -5,615 | -18,616 |
| Financing CF | 15,946 | 12,281 | 15,834 |
Comment: Ops cash flow is volatile. Investing burn (EV, capex) is heavy, financed by fresh borrowings.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 18% |
| ROCE | 13.9% |
| P/E | 29 |
| PAT Margin | 19% |
| D/E | 1.7 |
Verdict: Strong returns, but leverage is creeping up. Growth premium already priced in.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,21,269 | 1,39,078 | 1,59,211 |
| EBITDA | 20,285 | 24,892 | 30,518 |
| PAT | 11,374 | 12,270 | 14,073 |
Auditor Roasts: Consistent growth, solid margins – but EV investments will test future profitability.
Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Maruti Suzuki | 1,52,913 | 14,500 | 27.3 |
| Tata Motors | 4,39,695 | 28,226 | 8.7 |
| Hyundai India | 66,704 | 5,380 | 31.5 |
| Mahindra & Mahindra | 1,67,522 | 14,904 | 29.1 |
Comment: M&M trades at a premium to Tata, close to Maruti. Investors bet on EV + SUV leadership.
Miscellaneous – Shareholding, Promoters
- Promoters: 18.4% (low, but steady)
- FIIs: 38.5% (love the stock)
- DIIs: 29.6% (solid domestic support)
- Public: 9.8%
Promoter holding is low enough to make conspiracy theorists whisper “hostile takeover.”
EduInvesting Verdict™
Mahindra & Mahindra’s Q1 FY26 results prove it’s still India’s SUV king and tractor emperor. Revenue and profit growth remain robust, margins stable, and EVs offer an exciting future. However, rising debt, high capex, and a rich valuation mean this is not a free ride.
SWOT Analysis
- Strengths: SUV dominance, tractor leadership, diversified revenue.
- Weaknesses: High leverage, low promoter holding, IT arm margin drag.
- Opportunities: EV launches, rural demand recovery, global exports.
- Threats: Interest rates, commodity prices, EV execution risk.
Final Word: At ₹3,209, M&M isn’t cheap, but quality rarely is. Investors should buckle up – this SUV stock still has fuel, but expect bumps on the EV road.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Mahindra & Mahindra, Auto Stocks, SUV Market, Q1 FY26 Results, EV
