Mahindra & Mahindra
Mahindra & Mahindra (“M&M”) stands out as a solid industrial group that has delivered steady returns across economic cycles. What began as a steel trading business seven decades ago has grown into a diversified global group with more than 324,000 employees in over 20 industries across 100-plus countries.
What has impressed us most recently is M&M’s ability to gain market share across its core businesses of tractors, sport utility vehicles (SUVs) and light commercial vehicles (LCVs).
M&M is the world’s largest tractor manufacturer by volume, with domestic market share of 44% as of the third quarter of FY26. It achieved approximately 24% year-over-year growth in tractor volumes for FY26, significantly exceeding initial "low double-digit" guidance.
In the Indian passenger vehicle segment, M&M has repositioned itself as a premium SUV franchise, with models such as Thar, Scorpio N and XUV700 strengthening brand perception and driving sustained outperformance versus the domestic industry. M&M’s SUV revenues and volumes are outpacing peers, supported by premiumisation and favourable mix.
M&M has also made a credible foray into electric vehicles (EVs). Early demand for its EV models such as XEV 9S and BE 6 has been strong, with margins improving as volumes scale and production-linked incentive benefits accrue. Looking ahead to FY27, EVs should become a more meaningful growth driver, supported by a new greenfield facility with annual capacity of around 500,000 units and a 10-year capex commitment of 150 billion rupees.
As a result, M&M now ranks among the top one to two players by revenue share across SUVs, tractors, and LCVs, which is striking in terms of its leadership breadth.
The group’s capital allocation discipline is also improving. Returns at listed subsidiaries such as Tech Mahindra and Mahindra & Mahindra Financial Services are recovering, with management focused on lifting returns on capital employed rather than growth at any cost. M&M’s unlisted “growth gems” are also being structured to unlock value, with Mahindra Electric Automobile and Last Mile Mobility (LMM) bringing in strategic partners and laying out clearer paths to profitability.
As with Maruti Suzuki or Hyundai Motor India in earlier cycles, M&M is emerging as a consistent compounder on the back of better management execution and capital allocation and supported by its strong market position and focus on structurally growing areas like EVs.
On ESG, M&M has set ambitious sustainability targets, including carbon neutrality for Scope 1 and 2 emissions by 2040, 100% renewable energy usage and zero waste to landfill by 2030. It also supports rural livelihoods through initiatives such as Nanhi Kali and Project Kaabil, which focus on education, skilling and employability for women.
Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.