M&M says 'comfortably covered' on rare earth magnets for the next two quarters

M&M shares have risen 7 percent since the beginning of the year.

Mahindra & Mahindra has said it is well-insulated from the ongoing global shortage of rare earth magnets, a critical component used in electric vehicle (EV) motors. Speaking after the company’s Q1FY26 results, the management said it has taken multiple steps to mitigate risk and does not anticipate any production disruption in the near term.

"We are comfortably covered on the rare earth magnet issue, as we have shared earlier. There has been no disruption to production because of that," the company told analysts. "We’ve taken a series of actions — some related to inventory, others around substituting rare earth with light earth elements and ferrite materials."

The management added that Mahindra is covered for the current quarter and the next two, and “mostly covered” for the fourth quarter as well.

While the company’s internal preparedness is reassuring for its EV plans, the rare earth magnet crisis remains a serious concern for the broader auto industry. Just last month, Reuters reported that M&M's competitor, Maruti Suzuki, had cut near-term production targets for its first electric model, the e-Vitara, by two-thirds due to supply constraints.

Mahindra & Mahindra Ltd on July 30 reported a 32 percent jump in net profit at Rs 3,450 crore for the quarter ended June 30, 2025, driven by robust demand for its high-margin sports utility vehicles and tractors.

The carmaker's revenue from operations rose 26 percent to Rs 34,143 crore in Q1FY26 from Rs 27,133 crore in Q1FY25. M&M surpassed estimates as a Moneycontrol poll of six brokerage firms had pegged the automaker’s revenue at Rs 33,471 crore and net profit at Rs 3,112 crore.

Anish Shah, Group CEO & Managing Director, M&M Ltd, said, “The operating excellence in our Auto and Farm businesses is evident in continued market share gains and margin expansion.”

M&M shares closed at Rs 3,209, higher by 0.3 percent from the last close on the NSE. M&M shares have risen 7 percent since the beginning of the year.