M&M sticks to SUV growth outlook, expects PLI boost to power EV margins

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

Mahindra & Mahindra has reiterated its SUV growth guidance of mid to high teens for FY26, despite sector-wide concerns over demand sustainability and supply-side disruptions. The management, speaking on an analyst call post its Q1FY26 results, said that the company is well-positioned to meet its targets, backed by a steady stream of launches and tactical product refreshes.

To be sure, M&M's Q1FY26 SUV revenue market share increased to 27.3 percent from 23.5 percent in the previous quarter, the company's investor presentation showed.

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"We stay with our number" the management said when asked about risks to SUV growth. "We believe we can achieve this because we have two new electric SUVs and two more expected in calendar 2026. Minor variant refreshes, like the Rev-X2 on the XUV 3XO and updates to Scorpio N, have also helped." The company added that further model actions are planned over the next few months, supported by a strong launch pipeline that could spill into early 2026 and support FY26 growth.

However, the management flagged that any material deterioration in the macroeconomic environment could pose a risk, though current conditions support their guidance.

On electric vehicles, Mahindra clarified that the improved profitability visible in the latest results does not include any benefits from the government’s Production Linked Incentive (PLI) scheme. The company said it has qualified for the PLI under the XEV90 programme but is awaiting the final technical audit. "We expect the certification in Q2 or early Q3. Once received, we will accrue PLI benefits from near the launch period," the company said.

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The commentary suggests further upside to electric vehicle margins once PLI accruals begin. While Mahindra’s EV segment is still in early stages, the company pointed to improved operating leverage and strategic cost management as key contributors to profitability.

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.