Mahindra & Mahindra vs Bajajfinsv Q3 FY26

M&M delivered a strong Q3 FY26 with consolidated revenue crossing INR 50,000 crore for the first time, up 26% YoY, and reported PAT up 47% YoY. Auto and farm volumes grew 23% each, with auto margins expanding 90bps and farm margins up 240bps. SUV volume rose 26%, maintaining #1 market share, while LCV share reached 51.9%. The farm segment saw domestic operating profit up 64%, though international impairments dragged. Management highlighted breakthrough performances in Mahindra Finance (operating PAT up 97%), Lifespaces (profits up 5x), and Logistics (first profitable quarter in 11). Guidance remains qualitative: auto demand momentum continues, farm enablers strong, and EV ramp-up on track with 80,000+ units targeted for FY27. Key risk: memory chip shortages could disrupt production across the portfolio.

Guidance read

EV volume target of 80,000+ units in FY27: Management expects to sell over 80,000 EVs in FY27, driven by the three current models and a new model (BO7) launching in calendar 2027. Capacity addition of 5,000-6,000 ICE units by July-August 2026: Debottlenecking will add 5,000-6,000 units per month for ICE products like XUV 3XO, Bolero, Scorpio-N, and Thar. Nagpur greenfield tractor capacity of 100,000 units: A new greenfield plant in Nagpur will add 100,000 units of Mahindra-branded tractor capacity, with additional capacity for Swaraj under evaluation. Last-mile mobility IPO in FY27: Management plans to list the last-mile mobility business via an IPO in FY27 to unlock value.

Risk read

Key risks include Memory chip shortage could disrupt production — Memory chip shortages are driving premiums and pose a supply chain risk across the entire portfolio, not just EVs. Management is mitigating with inventory buildup but acknowledges severity.; Commodity inflation may pressure margins — Precious metals and other commodities are inflating; hedges cover only part of the exposure. Management has taken a 1% price increase but may need more if inflation persists.; Farm subsidy-led demand may normalize — Maharashtra's tractor subsidy added ~35,000 units this year; its withdrawal could flatten demand in FY27, though other states may compensate.; International farm subsidiaries continue to drag — Impairments in Japan and Turkey impacted farm profitability. Restructuring will take time, with trailing costs expected through FY27..

Promise ledger

Of 2 tracked promises, management 0 met, 0 close, 1 missed, 1 delayed.

Bajaj Finserv reported a strong Q3 FY26 with consolidated total income up 24% YoY to INR 39,708 crore and PAT (before exceptional items) up 32% YoY to INR 2,936 crore. The life insurance business delivered its highest-ever VNB of INR 405 crore (+59% YoY) with NBM expanding to 19% (vs 15.1% last year), driven by the successful Bajaj Life 2.0 strategy. General insurance maintained a healthy combined ratio of 97.9% (vs 101.1% last year), though underwriting loss widened due to labor code impact and upfront acquisition costs. Lending subsidiaries BFL and BHFL posted robust AUM growth of 22% and 23% respectively. The Allianz stake buyout was completed, strengthening group control. Guidance points to continued margin expansion in life insurance and resumption of revenue growth at Bajaj Markets from Q4. Key risk: motor OD loss ratios remain elevated due to pricing pressure and GST-related IDV reduction, which may persist if industry pricing correction is delayed.

Guidance read

Life insurance VNB margin expansion to continue, but taper: Management expects margin expansion to continue but at a slower pace due to base effects; GST impact pushed back margin targets by 2-3 quarters. Bajaj Markets revenue growth to resume from Q4 FY26: Revenue growth expected to resume from Q4 onwards after software migration to SFDC is completed in Q3. Bajaj Finserv AMC to launch AIF and PMS by end FY27: Plans to start alternative investment funds and portfolio management services targeting high-net-worth clients, subject to regulatory approvals. Bajaj Life setting up pension fund and GIFT City branch: Process of regulatory approvals initiated for a pension fund management business and a branch in GIFT City.

Risk read

Key risks include Motor OD loss ratio elevated due to pricing pressure and GST impact — Motor own-damage loss ratios remain high across the industry due to IDV reduction from GST and rising repair costs; pricing correction may take time.; Life insurance persistency dips across cohorts — Persistency ratios declined in line with industry trends; management acknowledged the issue and is working on it, but it could pressure future renewal premiums.; General insurance underwriting loss widened despite improved combined ratio — Underwriting loss increased to INR 137 crore from INR 43 crore last year, impacted by labor code charge and higher acquisition costs on new business.; Competition intensity in fire and commercial lines leading to pricing softness — Fire insurance pricing has softened due to good loss ratios and no major catastrophes, which could pressure margins if loss ratios revert..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.