Mahindra Q1 net profit rises 34%, standalone earnings beat estimates

Mahindra & Mahindra Thursday posted a 34% rise in consolidated net profit for the fiscal first quarter thanks to robust demand for sport utility vehicles and tractors, and strong contributions from group companies, even as higher commodity costs weighed on margins.

Profit for the three months ended June 30 rose to ₹5,455 crore from ₹4,083 crore a year earlier, while revenue from operations grew 28% to ₹58,188 crore from ₹45,529 crore.

The group’s core automotive and farm businesses, closely tracked by analysts, outperformed market estimates. The auto business reported a 32% revenue growth to ₹34,387 crore and a 21% rise in net profit to ₹2,129 crore.


The farm business posted a 15% increase in revenue to ₹12,501 crore while net profit rose 15% to ₹1,520 crore. SUV volumes grew 15% year-on-year to around 175,000 units. In the tractor business, domestic sales increased 18% and exports rose 15%.

Despite the strong operating performance, margins came under pressure as raw material costs surged. The automotive business had to contend with an “extraordinary” impact of 4-5 percentage points from commodity inflation before mitigation measures, said group chief financial officer Amarjyoti Barua.

Consequently, the auto business’ operating profit before interest and tax margin narrowed to 8.9% from 10.2% a year earlier, while in the farm business, it eased to 18.8% from 19.8%. “Some of the commodity pressures will continue into the second quarter,” said Barua.

Managing director and chief executive Anish Shah said the group’s diversified portfolio helped cushion the impact of geopolitical disruptions and rising input costs.

“All our businesses came together to deliver a strong performance,” he said, highlighting healthy contributions from Mahindra Finance, Tech Mahindra, and the group’s Growth Gems portfolio.

Looking ahead, Rajesh Jejurikar, executive director and CEO for the Auto and Farm Sector, said the company is maintaining its full-year guidance. “We are not changing our guidance,” he said, reiterating expectations of mid-to-high teen growth in SUVs, high single-digit growth in light commercial vehicles and mid-single-digit growth in tractors. He added that labour shortages at a handful of suppliers constrained production during the quarter, though demand remained robust.

M&M shares closed 1.7% higher at ₹3,278.9 on the BSE, outperforming the broader market where the benchmark Sensex ended 0.07% lower.