Mahindra Group is evaluating a restructuring plan that could separate its tractors, passenger vehicles (including EVs), and truck operations into independent entities, according to a report by The Economic Times.
The internal discussions, still at a preliminary stage, aim to assess the feasibility of turning Mahindra & Mahindra's (M&M) core divisions into standalone units. Both the automotive and farm equipment businesses have grown strongly over the past five years, reinforcing Mahindra's position in SUVs and tractors.
"The focus is to be future-ready and make all businesses independent. That helps unlock the business potential and helps scale," a senior executive close to the development told the publication. M&M declined to comment.
Analysts estimate that the auto division contributes nearly two-thirds of M&M's current stock value of over Rs 3,400. A possible demerger could sharpen capital allocation and improve market valuation.
Between FY21 and FY25, M&M's automotive segment share of revenue rose from 35% to 57%, while EBIT contribution climbed from 13% to 42%. The farm equipment share fell from 33% to 22%, with EBIT contribution dropping from 74% to 27%. SUV sales more than doubled to 5.5 lakh units, while tractor sales rose to 4.24 lakh units.
The move follows Tata Motors' recent separation of its passenger and commercial vehicle units. Analysts view Mahindra's plan as a value-creation step to enhance investor visibility, capital discipline, and strategic agility.
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