Mahindra & Mahindra vs Grasim 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.

Grasim reported a strong Q3 FY26 with consolidated revenue of INR 44,312 crore (+25% YoY) and EBITDA of INR 6,215 crore (+33% YoY), driven by robust performance across building materials, financial services, and core businesses. Birla Opus paints gained 300 bps revenue market share YoY, with volume up 70% YoY, and the B2B platform Birla Pivot crossed an INR 8,500 crore annualized run rate, ahead of its FY27 guidance. The chemicals business saw stable demand, while the renewables and financial services segments posted strong growth. Management maintained its target of INR 10,000 crore revenue for Birla Opus by FY28 and guided for breakeven at Birla Pivot by FY27 exit. Key risks include sustained discounting pressure in the paints industry and potential margin compression from raw material volatility in chemicals.

Guidance read

Birla Opus revenue target of INR 10,000 crore by FY28: Management reiterated achieving INR 10,000 crore revenue in the third full year of operations (FY28). Birla Opus profitability target within three years: Targeting to become a profitable number two player within three years of full-scale operation. Birla Pivot breakeven by FY27 exit: Birla Pivot expects to exit FY27 at breakeven level. Renewable energy share target of 40% in chemicals by FY27: Targeting renewable energy share in chemicals to reach over 40% by end of FY27.

Risk read

Key risks include Paints industry discounting pressure — Industry revenue growth lags volume growth due to high discounting and focus on low-value segments, which could pressure realizations.; Epoxy margin compression from raw material volatility — Management noted they avoided low-margin LER volumes due to margin squeeze; ECH price volatility could impact profitability.; Dealer churn and collection risks in paints — Analyst raised concerns about dealers stopping business; management acknowledged active dealer rates of 70-75% and focus on collections.; Cheap imports impacting cellulosic fashion yarn — Subdued performance in cellulosic fashion yarn due to cheaper imports from China creating oversupply..

Promise ledger

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