New Delhi: Exits from international subsidiaries and associate companies in Japan, Finland and Sri Lanka in the financial year 2026 have narrowed the list of loss-making foreign companies for Mahindra and Mahindra Ltd, which is resetting its international business to back profitable businesses.
The exits from international subsidiaries and joint ventures in the three countries have helped Mahindra and Mahindra shed companies with total annual losses of about ₹313 crore or 2.2% of its consolidated profit of ₹14,073 crore as of 31 March 2025.
With these exits, the major loss-making foreign subsidiaries of the Mumbai-based company have narrowed down to companies in the US, Turkey, Mauritius and Germany, which together posted losses of ₹670 crore, or 4.7% of the company’s consolidated profits for FY25.
Mahindra’s strategy to curb losses in its international businesses has come into focus after its exit from its Japanese subsidiary, Mitsubishi Mahindra Agricultural Machinery, on Monday, which it said will help reduce losses from a business it acquired in 2015.
“On completion of the liquidation procedure, the promoter group would not have to incur the annual loss as well as fund these losses,” the company said in an exchange filing on Monday.
The company’s renewed focus on exiting loss-making international businesses to double down on its high-growth areas and markets comes at a time when group chief executive Anish Shah is set to complete five years at the helm next month.
Since taking over in 2021, Mahindra under Shah has exited several key international loss-making businesses as it seeks to increase profitability. In 2025, Mahindra emerged as the second-largest carmaker in the country, even as it consolidated its leadership in India’s tractor market.
Weeding out lossmakers
The exit from the Japanese business came six months after Mahindra exited its Finland subsidiary Sampo Rosenlew Oy in September. In July, the company also sold its 35% in Mahindra Ideal Lanka (Pvt.) Ltd, a joint venture with its distribution partner Ideal Motors.
According to the company's consolidated list of subsidiaries and associate companies, which contributed to income and profit in FY25, 12 out of 20 foreign companies recorded losses totalling ₹1,031 crore. With the removal of three companies, the list has narrowed to nine.
A bulk of these losses from foreign companies came from a few entities, namely Germany-based Automobili Pininfarina GmbH, Mahindra USA Inc., Turkey-based Erkunt Sanayi AS, and Mahindra Automotive Mauritius Ltd.
While Automobili Pininfarina primarily designs and engineers high-performance electric vehicles, Mahindra USA manufactures and distributes tractors and utility vehicles. Erkunt Sanayi is a Turkish industrial company specialising in agricultural machinery and tractors. Mahindra Automotive Mauritius serves as the group's investment and holding company for its various international ventures.
In its FY25 annual report, the company acknowledged a slowdown in some of its key international markets, particularly in its farm and machinery business.
“For FY25, Mahindra has faced a demand slowdown in its key international farm markets, including the US, parts of Western Europe, Japan and Brazil,” the company’s commentary on its international business read.
Its laid-out strategy was split into two directions, with one hinting at measures to improve business while the other suggesting that the company will pivot away from some regions.
“In temporary slowdown markets like the US, the focus is on revamping the supply chain and enhancing product offerings. In structurally declining markets such as Japan (industry contraction) and Finland (affected by geopolitical tensions), we plan to pivot strategically to mitigate losses,” the company said.
- Mahindra exited three countries in FY26 to stem losses of ₹313 crore.
- The moves align with CEO Anish Shah’s five-year mandate of strict capital allocation and an 18% RoE target.
- Nine foreign subsidiaries remain loss-making, primarily in the US, Germany, and Turkey.
- The company is differentiating between temporary slowdowns, where it will reinvest, and structural declines, where it will exit.
- Despite overseas pruning, analysts expect a 12% CAGR in farm revenue through 2030, driven by domestic dominance and streamlined exports.
Path to profit
Industry observers have repeatedly noted over the past few months that the Mumbai-based company will fund only overseas entities with a clear path to deliver returns on its investments.
“While most of M&M’s investee companies are self-sustaining in nature, certain entities, especially those overseas, may require some funding support over the near-to-medium term,” credit rating agency Icra said in a September 2025 note.
“Comfort is drawn from the tighter capital allocation norms laid out by the company. The company will continue to support only those with a clear path to 18% RoE (Return on Equity),” they added.
Analysts say Mahindra will likely see double-digit growth in the coming years as it works to expand both domestic and international businesses.
“Consolidated farm revenue is likely to expand 3x over FY20–30E, implying a 12% CAGR over FY25–30E, led by industry growth of a 9% CAGR, market share gains and robust exports,” an analyst at Nuvama Institutional Equities wrote on 25 February.