Mahindra & Mahindra vs Maruti 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.

Maruti Suzuki reported a stellar Q3 FY26, with net sales surging to INR 47,500 crore (up ~29% YoY) and PAT at INR 3,800 crore (+4% YoY, impacted by a one-time provision of INR 594 crore for new labor codes). The GST reform drove a 22% domestic volume growth, with retail sales hitting a record 683,000 units and inventory at just 3-4 days. Management highlighted robust demand across segments, a 7% increase in first-time buyers, and a healthy order book of 175,000 vehicles. However, margins faced headwinds from commodity inflation (PGM, aluminum, copper) and rare earth supply issues. Guidance includes two new plants (Kharkhoda and Gujarat D-line) coming online by mid-2026, each adding 250,000 units capacity. Key risk: sustainability of demand post-GST euphoria and potential steel price hikes.

Guidance read

Two new plants to add 500,000 units capacity by mid-2026: Kharkhoda second plant (April 2026) and Gujarat D-line (soon after) each add 250,000 units annual capacity. Export volume target of 400,000 units for FY26: On track to achieve the export guidance of 400,000 units for the current fiscal year. CapEx run rate of INR 10,000 crore per year: Current CapEx run rate is about INR 10,000 crore annually; next year's budget to be finalized by March. Sustainable volume growth of ~7% initially estimated: Management had given an initial sustainable volume growth figure of about 7%, to be reassessed in three months.

Risk read

Key risks include Post-GST demand sustainability — Management acknowledged that Q3 demand included some postponed and preponed elements; sustainable demand level needs reassessment.; Commodity inflation (PGM, steel, aluminum, copper) — PGM content is ~2% of net sales; steel prices may rise due to safeguard duty misuse. Hedging is calibrated and may not fully offset spikes.; Rare earth supply constraints — Rare earth element supply issues caused 20 bps margin impact; management expects resolution as India develops local magnet manufacturing.; Export tariff risks (South Africa, global trade) — Potential increase in duties in South Africa and other global trade/tariff issues pose risks to export growth..

Promise ledger

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